If you’re starting a new business – what are hidden costs to be aware of?

Saving money as a small business

The most precarious time of starting any business is always at the beginning. If you’re considering – or have just established a – new ‘start up’ then get clued up about those hidden business costs. In this article, we’ll take a look at what you need to consider…

Your staff are crucial to your success

Building a team (even if it’s a small one) and team morale is crucial, particularly in the early stages of a business venture. Building your team of new staff members can often be difficult as nobody knows anyone else, and relationships are new. Therefore, when employees are working hard and delivering results, it’s important to show them respect and appreciation, to minimize employee turnover, which can be crippling. You want your labour turnover to stay low so you do not have to repeatedly pay for the training of new employees.

Consider boosting morale within the team with, for example, employee of the month initiatives? Or maybe setting aside funds for workplace socials, which are a great way to get everyone in the business interacting. Although there is a cost involved with these types of events, it helps employees bond and get to know each other on a personal level.

Additionally, it’s also important that continuous training is given to staff to help your business to try and stay ahead of competitors. As well as keeping staff engaged, training shows that you want to invest in your employees, and help them to stay on top of their workload (and targets).

Stay on top of your business model

No business operates without the threat of competition. Technology can help you to implement your business model effectively, which will help you to stay on top of orders and ahead of your competitors.

Being efficient is key to a fledgling operation. More efficient practices can be encouraged in the workplace; for example, employees can carry out tasks on the move with smart devices and tablets. By adding robust security measures alongside these technologies, you will avoid becoming a victim of the 3.6 million cases of fraud and 2 million cases of computer misuse reported this year.

Again, although there are costs involved in implementing these technologies in the short-term, the long-term benefits and efficiency savings in terms of cost will provide your start-up business with the competitive edge that it needs.

Get the best gas and electricity deals

UK micro businesses use an average of 7,500 kWh of electricity per year, with a bill of £1,062 (BusinessEnergy). Moving up to a small business, they would pay £2,038 annually, for around 15,000 kWh of power. A medium sized business is likely to pay £3,146 (25,000 kWh), whereas a large industrial business will more than often pay for 60,000 kWh, which equates to £7,346 per year.

And what about your business gas? You’re likely to use 10,000 kWh per year with a total average bill of £430 within a small business, 25,000 kWh and a total bill of £856 in a medium-sized business, and 45,000 kWh with a total bill of £1,424 in larger businesses.

Overpriced gas and electricity prices can make a serious dent in your business profits, which are usually minimal in the initial years of setting up. Make sure you find the right gas supply for your business, so that you can keep costs down and maximise profits.