You may not realise it, but that small business of yours is going to become very expensive to run at some point soon. For example, advertising on social media doesn’t cost a penny in the initial stages, but those marketing campaigns will soon start adding up, especially if you’re paying for more and more advert placements!
In truth, a small business is always going to be an expensive thing to run. It’s a small time hitter in a world of big fish, and building up that lengthy, positive reputation is going to take you a good while! You never know when you’re going to make it big time either, and all you’ve got to focus on is the small gains you’re making in the here and now. And for a lot of people, that’s a little too much.
And that’s why you need to know, ahead of time, where the hidden costs are stacking up, and really costing you the finances you need to be putting to better use elsewhere. With that in mind, here are the top three worst offenders for money leaks in your organisation.
The Utilities Bill
If you’re working from home, there’s a good chance your business utilities are already going to be covered by the bills you’re paying to keep the lights on and the heating working in your off hours.
And while this can cost you a lot over time, because it’s your home, you’re going to be checking to see just how much power your working hours are drawing on. If the numbers ever go critical, you’re far more likely to do something about it!
However, if you’re working from an office of your own, the utilities are going to be a hidden cost that rack up over time, and you may not ever check on them, as long as they’re being paid and you can still operate.
In a commercial building, the utilities are going to cost a lot more than they do within a home. After all, you’ve got more square feet to cover, and you’ve got more people to keep illuminated and warm while they’re working.
Let this point be the wakeup call you need about checking on your gas, electric, and heating providers in the workplace, and check that you’re not being overcharged. At the same time, it might be useful to try and haggle down that provider price.
Bank Transfer Fees
The bank transfer fees that you pay to take in a customer’s money are very minimal when you’re operating with the same currency. However, if you’ve got international customers on the roster, and you’ve got multiple foreign currencies to take care of, opening up a specialised business account to take care of their payments could cost you a lot less in the long run.
Indeed, regular bank fees could be costing you over $4000 in excess per year, depending on the amount of foreign currency you run through them, and for a small business like yours, that just isn’t on! You need a bit more flexibility and understanding from your financial sources, so be sure to do a bit of research into the options available to you here, because there are plenty of alternative providers out there. All in all, a money transfer specialist could take that 4% to 5% fee that the bank is charging you and turn it on its head!
Inventory Management
And then comes the idea of inventory management, which is tricky by its very nature. After all, you never know how much you’re going to sell, how much you’re going to waste, and you’re always aware of how much it’s going to cost to transport this inventory from the supplier to your store.
It’s why an effective inventory management system is so crucial. Of course, we all lose a few things here and there; making simple mistakes like these are all a part of being human! But in the business world, making mistake after mistake like this is going to cost you a lot. If you’re losing or wasting inventory, you could be punching up to 20% in your budget, and that’s not something you can afford to lose right now.
There are many ‘hidden’ costs in running a business, and you need to be as aware of them as you possibly can be. Make sure you know where the money is most likely leaking out of your business, and where the costs are hiding in plain sight.
