Every smart business owner will calculate the costs of running their company. However, there are often a few things that come as a bit of a surprise to you. These are some of the costs of running a small business that rarely gets spoken about. As such, they creep up on you and force you to rethink your budget.
Bearing that in mind, I’ve listed three of the key hidden costs in this article. Check them out and make sure you don’t forget them when designing a business plan.
Depending on where your business operates and in what field you operate in, you may be required to purchase licenses or permits. This is something so many business owners forget to factor into their plan when they’re starting up.
The bad news is that you can’t avoid paying for licenses if that’s the rule in your part of the country. The good news is, not all states have the same rules, so you could always consider moving your base elsewhere to get around this hidden fee.
Training your employees is something that slips under the radar when you create a business budget. You must ensure that your staff are all well versed in the right technology your business uses and that everyone is trained to do their jobs properly. This often results in an expensive training course, as well as downtime due to employees going away to complete training.
Thankfully, we’re beginning to see new ways of training employees that reduce these costs. There’s this idea called microlearning that’s becoming very popular. The microlearning process is all about providing employees with short training videos they can watch in their free time. It’s believed this can be half as costly as traditional training courses, and way more effective too.
Yes, hiring employees is costly as well as training them. Part of this is because you have to pay to train them, but there’s more to it than that. Posting a job advert online might cost money if you want to promote it to gain more visibility. Then, you have the cost of actually finding the right candidates and interviewing them. Do this yourself, and it costs you because you have to take time out of work to conduct interviews, meaning you potentially lose out on sales. Hire an agency, and it costs you because you have to pay them.
Ideally, you can keep these costs as low as possible by taking the time to hire the right people. This means you avoid needing to fire employees and go through the hiring process over and over again.
These costs are hidden in the sense that they’re rarely thought about until you notice them. Most of the time, it’s too late to do anything when you realize you’ve got these additional costs to contend with. My advice is to never rush into starting a business until you’ve thought about all the possible costs. Even then you should add some extra costs to your budget just as a safety measure in case you forgot about anything.