Here are six areas where costs have a habit of rising considerably if you don’t watch them closely.
Rental of business premises
This can be a tricky decision of course, the key is to find a premises which gives you the right amount of growing room, but without wasting too much on rent. Remember that moving a business can be costly too. A good commercial real estate agent should be able to advise on what your options are. Even if you are not planning to move immediately it is worth having a rough plan.
Internet accessWhen you start a business you may only need a small plan to give you the access and website hosting you require. But if your business grows, the same plan may not be suitable anymore. Make sure you compare deals on a regular basis and find a provider that is better able to cope with larger businesses. Even if your current deal is scalable, i.e. it can grow with you, it doesn’t mean you will get the best deal.
Staff timeAs you grow you will inevitably need more members of staff, and with that comes a management cost. It is easy mistake inefficiency as a signal that you need to hire and if left unchecked you can easily end up with under utilized staffs and high wage bills.
Every time you decide to hire a new member of staff, first have a good look at your business processes and ask yourself “If I wasn’t allowed another member of staff, how would I cope?”
Transaction costsAs you grow you will naturally change your scope of customers – you will probably be taking more payments and you might well also start doing a lot more overseas business.
If you make a lot of income from exporting your goods or services you need to watch the foreign exchange rates carefully to ensure that small movements don’t erode your margins. When you are busy growing a business it is hard to find time for this.
Of course terrestrial transaction costs, such as payment processing are a cost that can escalate too. As you grow it is important that you periodically review these costs and renegotiate as needed – remember, the bigger you get the more bargaining power you have.