Small Business Costs You Can Not Disregard
Do not ignore these business expenses...
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There are certain costs in a business that might seem insignificant. So insignificant, that many business owners can get away with not paying them. Then what happens? They realise that the small cost was a vital part of their business model. Suddenly, they realise that paying that small cost was saving them money. This type of situation is becoming common in every industry. Business owners are pressured into cutting costs to make their companies more efficient. However, you need to be careful that you don’t cut an area of your business that is crucial. What type of costs are we talking about?
We bet there are business owners reading this article right now that would love to cut out the section of their business designated to HR. Just think about how much money you could save if you didn’t have to pay all of those wages at the end of each month. Be careful though because your HR service is probably keeping your company legal. Without HR, you could run into legal issues with employees and hiring practices. If that happens, you’ll wish you still had your HR team. Particularly, when you’re hit with a lawsuit that costs more than their wages have in five years. This is just one area of your business that is crucial to your company staying successful. There are many more.
Inventory is important for keeping track of stock, sales, products and services. There are lots of different parts of the inventory model. In a retail company, you buy barcodes to be used for inventory. That is their main purpose. They allow business owners to keep check of their stock and more importantly, sell at the right price. There are quite a few small stores that do without barcodes. Instead, they rely on the staff knowing the prices and noting the stock. For a tiny store this might make sense but for a medium sized shop, they’ll lose a lot of money. Thus not buying barcodes becomes counter productive. You do need to invest money in inventory management to keep your company working effectively.
We think we know why business owners have stopped paying for IT support. IT support is a countermeasure for the worst case scenario. That scenario being that your tech breaks down, and you need assistance. If nothing breaks down, your IT support team on staff can seem like a wasted spend. However, you’ll be glad you’re paying for it on the day your computer systems do break down. Without an IT support team, disaster recovery can take at least two weeks. Two weeks where you won’t be able to function on the market. Essentially you’ll be dead in the water.
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Finally, you do need to make sure that you’re paying a little more for the best packaging of your products. Otherwise, you will get bad reviews from customers and clients. Particularly, when your items start to arrive broken or damaged. At that point, those reviews will hurt your profit margin and cause it to drop sharply.
As you can see, these costs might seem redundant. However, ironically, they are all saving your business a lot of money.
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