It’s essential to be able to budget in business. Having some form of predictability in your finances is essential for those future plans you’re going to make. Yet, besides the regular expenses and income, you will often find you have less money than you thought. And why is that? It’s because there are expenses you’re not thinking to account for. Here’s how your busy is losing money right under your nose.
Be more resourceful
Every business should expect little one-time costs that come as a result of the passage of time. A piece of furniture might break, a piece of equipment might need a repair. They might be negligible costs in the moment, but they will build up if you’re not taking proper care of your equipment. Extend the life of your furniture by investing in higher quality and protecting it with materials like laminate. Have a proper preventative maintenance schedule for your hardware. Use your resources more wisely.
Hold onto those employees
Even more expensive than having to replace a table is having to replace an entire person. In fact, some studies say that you could be paying over £30,000 when you replace an employee. From the labour lost while you wait for a replacement, to the hiring process and training involved, it’s not too far-fetched to see how you could get to that number. So do your best to keep your employees. First, focus on those who don’t do too much job hopping and show signs of looking for a reliable long-term career with you. Then make sure you’re going the extra mile to retain them, like making sure their job engages and motivates them.
Get your money
If you run a business that offers payment options besides immediate transfers and cash, then you’re probably doing a lot of your accounting based on projections. Yet, late payments and unreliable customers can cause you to deviate a little too much from those projections. If you’re invoicing, make sure that you’re firm with setting and following deadlines. If you have any kind of credit options, then it’s a good idea to use services like a credit recruitment agency to get people on your side who can help you see whether or not a potential borrower is reliable enough for the business.
Get more done
It can be harder to measure, but you need to think about how much work you’re getting done for the amount of time spent in the office. If you’re not getting a return on investment for each of your employees, then you will be losing money without even recognising it. Instead of having to let them go, see if you can’t help them get more productive. For instance, teaching proper time management and improving communication with workflow software can see you get a lot more done in the time you have.
You can never truly predict your finances to a level of 100% accuracy. But what you can do is eliminate the risks of hidden costs by taking the times to identify where they might arise from. Hopefully, this article helps you do that just a little better in future.
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