All business owners are going to be aware of some of the major expenses that come with running a company. From paying staff to buying or manufacturing stock to paying rent and utilities on premises, there are many different types of expenses that need to be managed. Let’s take a look at some of the smaller ones that need to be taken care of too.
Businesses are likely to have many professionals that they keep on retainer. Most common ones tend to be a solicitor and an accountant, but there are many others that could prove to be useful. Paying a retainer fee is often more likely to be cost-effective compared to paying for the professional to tackle it on a case-by-case basis.
When you pay a retainer fee, you are choosing to pay a professional for a portion of their time each month. If their work for you exceeds this allocated time, you will have to pay for the extra services. However, this rarely happens. Most are able to work within the parameters of their retainer, and it can be a useful agreement that can lead to a brilliant partnership for many working professionals.
Nowadays, the vast majority of payments are made using bank cards. This can be a very different process compared to accepting cash, and therefore a business owner needs to make sure that they have the right tools on hand to be able to complete the transaction.
One expense that can come with this are credit card processing fees. These are usually present on transactions where there is no card reader, such as in an ecommerce shop. Your business might have to pay these credit card processing fees to the company that handles the transactions, and it can cost you more than you might think each month.
Small business owners need to keep an eye on transactions like this, especially as it could mean that they are paying far more than they mean to each month. It is vital that they keep a close eye on payments such as these, with an intent to drive them down and minimise this expense as much as possible.
While a small business owner might be aware of costs like rent and utility bills, insurance might slip by them. You need to make sure that you are paying for the cost of insurance – and it might very well be one of the most important expenses that your business has to undertake.
Business insurance is not a “one-fits-all” deal, and while you can find bundles that offer some of the policies that you might need, you should make sure that you are properly covered. No one should be trying to operate a business of any sort without the correct insurance in place.
The first policy that every business needs to have in place is general liability insurance, but there are many others that could also be applicable. For example, some businesses might need professional indemnity insurance, or commercial vehicle cover. It is also often required by law to take out employer liability insurance before you hire your first employee. This is one area of business that you cannot afford to get wrong, as it can have some major and expensive repercussions for you if you do so.
Speaking of employees, there are expenses that can apply to them beyond simply paying their salary. Nowadays, some candidates can expect a bit more than a salary when choosing roles. Flexible working, discounted gym memberships or travel passes, and many other perks can all be offered to make a job more competitive. However, these can also create an expense that a business owner will need to cover.
On top of this, you have to consider the cost of training. It can often be worth it to invest in an employee and improve their skills rather than trying to hire someone new who could potentially meet the needs of the business. Hiring externally can be expensive, and while training and internal promotion aren’t necessarily cheap either, they might be a more realistic expense for a business.
Every business needs a website. Nowadays, many people choose to look up a company’s website before visiting them the first time. This means that the business needs to create a beautiful and informative website that can give the visitor access to any information about the company that they could want to know.
Developing the website will have its own costs – especially if you use a professional web developer, however, there are several expenses that continue beyond this. The main one of these will be web hosting. If you have used a website builder to construct your site, you might be able to add on the cost of hosting. It should never be too much per month, but it is an expense that you need to be aware of.
In addition to this, you need to think about the costs of website redevelopment. While you might not have to make many major changes for quite some time, you will often have to go in and make tweaks here and there. Depending on the nature of the new content, this could be some fairly expensive changes to make.
If you mail out orders to customers in addition to having a retail unit, or even if you are based purely online, you are going to encounter the issue of shipping at some point. You need to make sure that you are accounting for some of the many costs associated with shipping. It might vary quite differently depending on where the customer is located. Though free shipping promotions are great to run, they might not be feasible to have in place permanently.
You also need to think carefully about the delivery partner that you choose to use. Unfortunately, the cheapest might not always offer the best value for your customers. When it comes to shipping, you can often find that customers are willing to pay a little more for this service if it helps to guarantee that they are going to receive their goods in a reasonable time and condition.
Businesses should also be aware of the expense of shipping internationally. Customs and excise fees can be a significant cost for either businesses or customers to handle, but it is something that needs to be addressed. Many companies decide to incorporate these fees as part of their shipping fees at check out, and this can be a good way to handle it so the customer does not feel like they are spending even more to get their items through customs.
Running a business means that you can be subject to more expenses than you might think. There are several key areas that cannot be neglected, but they can be minimised and handled properly so they are not a significant drain on resources. Knowing how to handle these expenses can be as important to the health of the company as managing the larger ones. If you own and operate a small business, make sure that you know how to best manage these small expenses.