When you run a small business, every little bit of money can go a long way. You need to become efficient at managing cash flow and ensuring that your expenses aren’t outstripping your incomings. However, you can hit the occasional snag that throws your plans into disarray.
Here are a few examples of surprise expenses which your business could encounter. In planning for these risks, you can help yourself to minimize them.
A rapid turnover of employees
It’s not financially healthy to have a constantly revolving door of employees – as, when employees leave, you need to pay an array of costs to recruit new workers and get them up to speed.
While you might attempt to save money by posting job listings at no charge online, you and your staff would still need to spend time interviewing applicants and then choosing between them. Putting each new worker through internal or external training can also burn through your finances.
A productivity-unfriendly working environment
Once a new worker does get underway at your company, can you be sure that they are working to their optimum ability? Unfortunately, their office environment might mean otherwise.
“Worryingly, just 54% of employees agree that their workplace enables them to work productively,” Tim Oldman, CEO of think-tank Leesman, has told The Telegraph. He has advocated that small businesses should offer various work areas to help their personnel to maximize their productivity.
Having an online returns policy
If you run a small business, steering it into e-commerce can initially seem promising. The world is now your marketplace; how could you possibly fail? Except that, well, you could – because the expense of managing delivery and returns can make continued online operations prohibitive.
Barclaycard research cited by The Guardian reveals that 22% of bricks and mortar retailers have decided against selling online out of concern about that expense. It isn’t helpful that, according to the research, 47% of surveyed customers wouldn’t order from an online shop that charges for returns.
Lengthy delays in payment
According to the e-invoicing firm Tungsten, 12% of UK small and medium-sized enterprises (SMEs) need to wait at least 90 days to be paid by customers. This has led to SMEs needing to set aside sufficient cash reserves to weather the storm while they wait for payment.
Therefore, it would be in your small company’s interest to insist on receiving payment in 14 or 28 days each time. Doing this would let you speed up your own bill payments and reinvest in your firm.
You can lose precious inventory in various ways. Shoplifting and administrative blunders can be to blame – and, sadly, you might not always be able to trust your own employees not to steal items. Small Business Trends says that employee theft “occurs in all types of companies”.
Insurances that can help your business to recover from robberies or burglaries include business interruption and loss of money cover. You can get appealing deals on both by sourcing business insurance quotes through a broker.