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7 hidden costs in running a small business

Have you created an in-depth budget for your small business? Though there are many standard costs which you need to consider there may be hidden costs which only crop up when you start your business. And these surprise hidden costs could debilitate your business if not considered. Let’s take a look at seven hidden costs of running a small business.

1. Getting legal

Some industries require you to have certain licenses and permits. All businesses may need to pay subscriptions for applications or networking groups you are part of. Ensure that you have the licenses and permits in place. When it comes to subscriptions, ensure you have the right level of subscription for your needs. You will need to review these every year to ensure you still use the app and that the level of subscription doesn’t need to be changed.

2. Being paid late

Cash flow is the lifeblood of your business. When customers pay you late, you not only lose the money you have billed them, but you also lose the money it costs to keep a cash reserve, take out a loan or have an overdraft. You need to be clear on when you want to be paid and the penalties you charge if your customers don’t pay on time.

3. Protecting your knowledge

Have you created an epic brand, or have you designed something which is incredible and useful? Then it is time to consider intellectual property (IP) protection. This may seem like an unnecessary cost but if you fail to register your IP then your competitors could register your brand or patent your idea. This could put a spanner in your business dreams.

4. Finding out about payment processing fees

Yes, you got paid. But what were the bank charges for completing the transaction or for swiping the card? Bank and card charges are often forgotten about when it comes to accepting payment. It is important to research the various charges which occur when you get paid. Then you should make sure you have considered them in your budget.

5. Safeguarding your data

With the advent of the internet, crime has moved online. According to astra.com, nearly 4000 new cyber-attacks occur every day. With this statistic in mind, it becomes imperative for businesses, no matter the size, to protect their data, especially if they deal with sensitive data every day. If you get hacked and the data is stolen, then you will be in breach of the POPI act and not only have to face your customers but may need to hire a lawyer too.

6. Limiting inventory storage

The inventory on your shelf is deteriorating in value as it sits there, especially if it is perishable goods. Therefore, it is important to consider how fast you can sell a product and what requirements are necessary to store it. Storage and distribution of a product can add to the cost of a product.

7. Hiring wisely

It has been noted that hiring a new person can cost up to four times the salary of a staff member. Therefore, you need to carefully consider the position you are hiring for and the type of person you would like to fill the role. Next, you should review the CVs carefully and only choose those who will be a great fit both to the position and culture of your business. Also, consider what perks you offer as these can add to the cost to company but there are some perks which only cost time rather than money.

By going through these seven hidden costs, you should be well on your way to succeeding in running a successful small business.

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