Hidden Costs of Business

[TinDesign]

Well there are the typical expenses like salaries, supplies, accountant ect.. But there are a few invisible expenses, low productivity, equipment failure and theft.

It may seem small but over time and especially when not confronted it can mount up to substantial costs.

Are there any other hidden expenses that you have ran into running your business?
If so how have you overcome them?

 

[BustersDogs]

Damage to my vehicles, including 2 hit and runs, one complete denial and having to go to court and the latest - keying one of the doors and two rear wings. All of which add up to the complete loss of the no claims bonus I'd just rebuilt after having a car stolen around 7 years ago.

 

[herewegoagain.]

The one for me was last year was the shop got broken into and due to a major local incident, the Police did not attend for 4 days !!

4 days loss of trade, wages, stock, the hours upon hours I spent clearing up the mess (which as an owner you never get paid for!) and when speaking to the insurance co, they would not cover loss of trade for the first 2 days as it was in the 'small print' - !!

I was shafted all ways !!

 

[crystalballltd]

We provide solutions for quite a few of the hidden costs you've listed and I've added a few ones you haven't that when you add them up across a large company can be quite significant:

1. Personal use of company fuel
Solution = Vehicle tracking (Reports on daily journey's and out of hour usage)

2. Personal use of company mobiles
Solution = Mobile monitor (Monitors call durations, numbers, SMS message in realtime)

3. Inefficient use of company fuel (Vehicles left idling)
Solution = Vehicle tracking (Reports on idling time of your drivers)

4. Wear & tear of company vehicles (Caused by harsh breaking, acceleration, cornering)
Solution = Vehicle tracking with driver behaviour reporting & driver re-training

5. Vehicle theft
Solution = Better security, Vehicle tracking can help with the recovery of your vehicles.

6. Increase productivity (mobile workforce)
Solution = Mobile tracking (Journey Routing, Visibility) & Mobile monitoring
(Accountability, Resource management)

 

[alwaysinamess]

Biggest hidden cost for me is when your too busy with the work whether profitable or not( I assume mine is) and other things slip,

Im paying a mortgage on a place I dont even use, 12 Months at £500pcm =6k pa, Im paying rent on a Unit I don't even use at 2.5k PA and 2 garages at £1600 p.a

I add that up over 12 months and its 10k down the drain, £27 per day that is wasted

 

[Jasmine Rofel]

Underestimating the amount of cost you’ll absorb is a key factor in business failure, but with our short list of hidden costs, you’ll be on the right path to running a successful small business.

Industry association fees

Licenses or permits

Legal services

Credit card fees

Employee benefits

Cell phone service

Renting office space

Utilities

And more..

Regards,
Jasmine

 

[crystalballltd]

Hey Jasmine,

I'm not sure I'd class some of those as hidden costs?

You tend to know how much your mobile phones, rents and utilities are going to cost from the outset right, they tend to feature in most business plans right?

Underestimating the amount of cost you’ll absorb is a key factor in business failure, but with our short list of hidden costs, you’ll be on the right path to running a successful small business.

Industry association fees

Licenses or permits

Legal services

Credit card fees

Employee benefits

Cell phone service

Renting office space

Utilities

And more..

Regards,
Jasmine

 

[Philip Hoyle]

Time and time again, I see the consequences of the likes of road works, road closures, pedestrianisation, bus lanes, traffic bollards, one way streets, parking restrictions, etc. - all the kind of things that the councils would have you believe will "help" your business!

These kind of thinga can make or break a business and there's usually nothing in the way of compensation. Not just for retail either where the effects are most noticed, but also for the likes of offices, warehouses, factories where traffic problems can put off customers - sometimes even put off salesmen, potential staff, suppliers, meaning you lose future potential.

One of the worst I've seen was where a bus shelter was erected right outside a small office - completely blocked the front of the office, so the window signage, external signs etc were rendered pointless. Absolute loss of passing trade with immediate effect and they were tied in to a lease so couldn't even move without incurring two lots of office rental.

 

[herewegoagain.]

I personally dont trust councils as far as I could throw them - all in it for themselves, I am sure a lot of these 'schemes' - road works etc, street scene etc... there is some sort of 'kick back' in it for them - the old equivalent of a brown envelope full of tenners !!

 

[contract hub]

Roll over contracts. We missed the termination window with our current supplier and ended up getting rolled over... at a rate 30% above the market rate... not nice. The regulator banned this practise for consumers but its still legal for business contracts

 

[Stef27]

Along with office space costs, a new cost that I became aware of recently in serviced office space, is that the power points/LAN network points should be tested yearly, but the serviced office provider does not always absorb the cost, and charges the test out to the company renting, at £1 per power point or LAN point tested.

 

[Gillie]

How about foot and mouth disease?

No way of getting round it when your business is tourist dependent and it shuts down the whole area due to it!

Ok so rather dramatic - but it did actually happen to me - shut down my first ever business back in 2002 - after struggling on for a while trying to get over it.