4 Hidden Costs That Affect Small Businesses
As entrepreneurs all across Canada already know, running a small business often requires big expenses. Between advertising, renovations and buying inventory (just to name a few of those expenses), quite a bit of money is required to keep a brand afloat. In some cases, emergency situations arise that aren’t expected. And then extra money needs to be located in order to resolve those issues. In addition, every small business has to deal with hidden costs.
Here are four of them:
1. Shrinkage. Unfortunately, all small businesses have to contend with inventory loss that comes as a result of shoplifting and administrative errors. Sadly, employee theft is also a reality that many small business owners have to deal with. And, when it’s all said and done, this amounts to a loss of revenue that impacts a company’s bottom line. These aren’t costs that business owners usually think about when starting their companies. But, it’s a reality nonetheless.
On SmallBizTrends.com, Barbara Weltman reveals just how much shrinkage affects small businesses each year. “The Global Retail Barometer pegs the annual loss to retailers in the U.S. at $42 billion,” she writes, “And retailers aren’t the only businesses affected. Employee theft occurs in all types of companies. You can, of course, reduce your exposure by implementing loss prevention practices…Some employees will steal no matter what and it will drain money from your company.”
2. Office Space and Utilities. Naturally, you need a location to run your business. And there’s no such thing as free rental space, unless, maybe a family member or friend owns the business location. And even still, there are costs associated with repairs and replacements to office supplies. If you own your own business location, then it falls on you to fill it with the necessities required by your staff to do their jobs.
On WaspBarcode.com, Brian Sutter writes that it’s highly important to consider just how much space you need for your business location. “Before renting office space or purchasing property, think about how much space you need now and what you’ll need once your business starts to grow,” he advises, “Does your business require more than a home office can provide? Will temporary office space work?”
3. Payroll Taxes and Benefits. Remember that the members of your staff will want more than just their salaries for working for you. Most employees are aware that they are entitled to benefits, among other perks of the job. “When you hire an employee, the wage paid to the worker is only a part of the overall cost of employment,” Weltman reminds us, noting that employment taxes, workers’ compensation and fringe benefits are all costs associated with hiring staff.
4. Insurance. “These will be the most important cheques your business will write every month,” insists Sutter, “At minimum, you will need both employer liability and public liability coverage. It’s also a good idea to carry insurance for negligence, property, illnesses and injuries.” To save money, he suggests that you negotiate with your insurance providers. Especially, if you have a good record, they will be more liable to offer you discounts.
At Synergy Merchants, we provide Canadian small business owners with the ability to secure funding quickly in order to tackle the many hidden costs of running their businesses. For more information about our unique merchant cash advance program or to speak with one of our licensed funding specialists to get a free, no obligation quote, simply call Synergy Merchants at 1-877-718-2026 or email us at firstname.lastname@example.org.