At Hold Everything, the virtual office company based on London’s prestigious Regent Street, we are very much aware of hidden costs, not only attending to our own business running costs but being aware that our clients need to know upfront the costs of using our services.
Our Simply Mail forwarding account for UK based businesses is all-inclusive and we do not charge for mail forwarding of mail over 2 kilos, so no surprise invoices.
A report by Forbes has concluded, 7 out of 10 new employer firms survive at least 2 years, half at least 5 years, a third last at least 10 years and a quarter stay in business 15 years or more. So what do you have to do to become a part of the quarter that survives 15 years or more?
Building a business isn’t easy and certainly it isn’t cheap. Before setting up a small business knowing your facts on all expenses, and not just evident costs such as salaries but the hidden ones like licensing fees, subscription and online software fees can be the difference between your businesses ability to survive or sink, after all you want to be sure your income continues to exceed your outgoings.
Let’s take a look at a few hidden costs of running a small business:
- Office Rent – Many companies feel they need a physical presence – some will ultimately need the space to operate from others just Go virtual. At Hold Everything we understand the need for a physical office. However, in today’s world more and more companies can operate on a ‘virtual’ basis – providing the phone is answered when it rings, does it really matter whether that person is sat in their plush office/work space, or at a desk in their home?
- Licensing Fees – It’s extremely important to understand what license you need for your business (if any). Just the physical location alone can affect how much the government charge for a business license.
- Credit Card Fees – Obviously your expecting your consumers to purchase your product/service, however, by allowing your customers to use a credit card to pay you will occur credit card fees. Don’t stress! Take a look at Business News Daily’s article on tricks to lower your credit card fees.
- Insurance – Your business needs to ensure it has the right protection in place to cover you for any accidents, loss or serious difficulties with a client. Types of insurances are essential are, Public Liability insurance- if you work at external locations or have clients or customers come to your work place, you will want to protect against any claims made in the event of damage or injury and Professional indemnity insurance – if your work could cause a financial loss for your clients. There’s a range of other covers, including business equipment insurance, tool cover and personal accident insurance so it’s best to get professional advice on what is needed for your business.
- Your Time – this is one of the biggest hidden expense that certainly cannot be ignored. Being the boss is an excuse for having to be involved in every aspect of the business and not delegating accordingly. But the most efficient way for you to grow your small business is not wasting your own time by doing work that others can do.
As a monthly practice, Richard Cooper looks at all costs less than £100.00 and asks if any can be avoided or if any supplier can be changed, small changes add up. He also looks at the large annual costs which arrive at set times, like accountancy fees, industry subscriptions and insurances to see if paying these on a monthly standing order basis can spread the cost rather than having an invoice for a larger fee so not affecting cash flows.
Nothing worse than that unplanned large payment.
So plan ahead when you start your new business.