This is a collaborative post.
When starting your own business, there will be some expenses that you are prepared for ahead of time. For example, if you plan to run an ecommerce business, you’ll need to have the funds set aside to source the right materials for the product you are selling, alongside employee wages.
However, some of the costs of running a business are not spoken about as often – meaning that many new business owners are surprised when these payments become a necessity. In some cases, this lack of awareness could spell danger for a company.
Photo by Andre Taissin on Unsplash
With that in mind, here are some of the unexpected costs you may encounter when starting or running a successful business.
Maintenance fees
While you may be prepared for the costs of buying the right equipment and tools for your business, it’s equally important that you can pay to maintain them. In fact, you should be prepared to spend around 3-5% of your business income on maintenance, whether you are repairing damages or replacing faulty equipment.
For example, if you have lifts in use in any area of your business, from a dumbwaiter to a stairlift, then you need to be able to pay for regular lift servicing. This will reduce the chances of a major breakdown occurring, which could cost a great deal of money to repair and could also impact your business’s efficiency by impacting your productivity levels.
Amenities & Bills
While most businesses start at your home, it goes without saying that you should plan to hire out factory or office spaces as your company grows. While many owners budget for this, they often forget to factor in the costs of keeping these places up and running – such as bill payments. For example, you will be in charge of paying all of the energy, water and electricity bills at your facility.
Thankfully, there are plenty of steps that you can take to reduce your energy bills, such as switching to renewable energy. This is excellent news when you consider the rapidly rising cost of energy in the UK.
Employee Benefits
Employee salaries and employee payroll services are some of the more obvious costs associated with running and expanding your business. After all, you must be able to offer an attractive salary if you want to welcome the best of the best to your team. However, it’s also essential that you do not forget some of the additional costs of hiring staff, such as employee benefits.
These benefits could range from training programs and courses to reward schemes, which are essential in maintaining a positive workforce.
Poor employee retention
When looking at your finances, you must view your employees as a necessary ‘expense’ associated with the smooth running of your business. After all, you’d struggle to complete your workload without them. As a result, it’s equally important that you know the costs of poor employee retention, especially as we are experiencing a period known as the Great Resignation. Whenever an employee leaves your team, you’ll have to begin the hiring and training process again, which can cost a great deal of money. In fact, companies can expect to spend £3000 per hire.
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