Many people realise that running a business comes with a lot of costs, but there are some expenses that can often be overlooked.
These costs can often catch business owners out and lead to cashflow problems. Here are just 7 overlooked business expenses and how to reduce each of these costs.
A business has to abide by certain legal regulations. This could involve paying for licenses and permits. On top of this, legal help from solicitors is often required to stay protected from lawsuits – this could involve getting contracts professionally written or paying for trademarks.
Whilst you can’t always cut the cost of these legal matters, ignoring them could result in greater fees such as fines or lawsuits. Try to look for a reliable solicitor who charges on an hourly basis – having a solicitor on call could be handy for helping you with any legal issues you may have.
Software subscriptions and IT support costs can also start to add up. Many modern businesses are heavily reliant on computers, so these costs are unavoidable.
That said, you can often reduce IT costs by not getting sucked in to paying subscription fees for software you hardly use.
Nowadays, there are many all-in-one business programmes that can handle various business tasks – these could save you money rather than paying for multiple pieces of software.
Many business owners understand that they have to pay their taxes, but many fail to realise that this could involve hiring an accountant or at the very least paying for accountancy software.
You can save money by doing your bookkeeping yourself – if you don’t feel confident doing this, you’re best paying that extra amount of money for an accountant.
Try getting your records to your accountant early – many accountants will charge more the closer you leave it to the tax deadline.
Almost all businesses require energy to run. Even if you run a business from home, you could be using up extra electricity. Large offices with lots of computers meanwhile can often feel the sting of energy bills.
To save costs in this area it’s worth always buying energy-efficient machinery. Other measures such as replacing regular bulbs with LEDs, insulating your office and unplugging machines that aren’t in use can all save further costs.
Whilst some insurance schemes are voluntary, others can be compulsory such as employer liability insurance if you choose to take on employees.
Many business owners can be caught out by insurance costs – especially those paying multiple schemes. When searching for business insurance, try to look for insurers that offer collective schemes as these will often save you money.
Offering to pay a high deductible and invest in health and safety/security measures can lower your insurance rates further.
Taking on employees is a big expense – many business owners are aware of this before recruiting their first staff members. However, it’s not just the wages that you have to budget for.
There are a number of employee benefits that also need to be paid such as pension contributions, holiday pay, overtime and sick pay. On top of this, you may want to offer your own courtesy benefits such as bonuses or paid lunch.
It’s worth investing lots of money into your employees as this can often make them more productive and more loyal. If you fail to offer any benefits, you could find that your staff don’t stay with you for long.
Of course, this doesn’t mean that you should be over-generous, however you do need to be prepared to spend money on more than just the basic requirements.
The hiring process itself can also be expensive. You may have to pay for job ads or even pay money to a recruitment company. You may also have to pay for background checks or provide paid training in some circumstances.
It’s worth having a thorough hiring process in place, but you don’t have to spend huge amounts on recruitment. By far the best way to reduce this cost is to simply focus on reducing your staff turnover – the more employees that leave, the more you’ll have to spend on recruitment.