7 Hidden Costs in Running a Business

Running a successful business can be hugely rewarding, especially as far as profit and revenue are concerned, but there are some hidden costs to consider.

Insurance

As a business owner, it’s important to protect yourself in case something goes wrong. This is where property insurance, liability insurance and worker compensation come in. Though these all have a monthly fee, the cost of a claim can quickly add up to much more and insurance is there to help you cover the cost.

Hiring and Firing

You are sure to be aware that hiring costs money, and this is a key part of growing your business and improving your team. However, you might not consider it from the other side. Putting money into the hiring process and ensuring that you choose the right candidate boosts employee retention, which can save money further down the line.

Benefits

Employee benefits such as healthcare and holidays will cost your business, but these are hard to avoid. Employees have become accustomed to workplace benefits, and it’s often why they choose to work at one company over another. Though there is a cost associated with employee benefits, they can help with employee retention.

Equipment

One of the biggest costs a business will face is equipment, especially when you are first starting out. Everything from computer hardware to printer paper, from furniture to pens, needs to be paid for. This isn’t something that only affects new businesses, as equipment will need to be replaced and upgraded over the years.

Shrinkage

Regardless of how hard you try to avoid stock going missing or becoming damaged, shrinkage is something that every business needs to think about. Breakages, loss and theft of goods can put a significant dent in your profits, as can the loss and theft of business supplies.

Payment Fees

A lot of businesses accept card payments, as this makes it a lot easier for customers to make a purchase. Less and less people want to carry cash, and so accepting card payments is a key way to maximise the chances of a sale being made. However, there are payment fees to consider. You need to factor card payment fees into your costs, as even a small percentage per transaction quickly adds up.

Payment Delays

One of the costs that many business owners overlook is the cost of payment delays. If you invoice clients and they don’t pay on time, you could fall behind on your own financial obligations. This could result in additional costs for you, such as late payment fees that would have otherwise been avoided.

At Profici, we provide a wide range of services to help your business succeed online. To find out more about who we are and what we do, get in touch