Running a business will be stressful but this stress can be reduced if you can predict annual expenses. Being able to drive down fixed expenses can allow a company to become far more profitable. Driving these costs down should not come at the expense of employee productivity or quality of work being done. A great way to drive down costs is to allow an entire staff to work remotely. Not having to have an office can drive down a huge cost of rent. The pandemic has allowed a number of small business owners to see that remote work doesn’t mean productivity will decrease. In fact, in many cases it will increase due to elimination of useless meetings and chatty coworkers that can act as a distraction. The following are expenses that you have to factor in at your small business.
Employee Wages
Employee wages are going to be fixed and are something you need to account for. Keeping some money aside for bonuses can be wise to reward top performers and to incentivize others to step up their game. You have to make the decision of whether you want to employ a huge staff or a small staff with a number of freelancers to help scale. Freelancers can be immensely useful when you need to knock out a project quickly but lack bandwidth. Upwork is a great platform that can connect you with freelancers and you will be able to view reviews of their previous work. Creating a team of great freelancers can really help in a small business.
Damages to the Office
There are some small businesses that have to deal with damages annually due to severe storms. Others have had their businesses destroyed by protests that quickly turned into riots. Getting glass doors with security glass can be immensely helpful. You do not want a window to shatter which could lead to equipment being damaged by rain or looted. Insurance costs will cover most out of this but these payouts might take months to get. Florida is notorious for slow payouts after hurricane damage has ravaged the entire state.
Marketing Costs
Marketing costs might not be a huge deal if your business consistently sees a massive ROI on marketing spend. For companies that are not as successful at marketing, this can actually deliver negative ROI. Enlisting the help of a digital marketing company is far easier than hiring a marketing team in-house. An agency can provide results and proof of results from related campaigns. Keeping an agency on a month to month contract will allow you to drop them if they fail to perform. If an agency wants a year-long agreement, let them know you will give them a trial run for a few months before entering into a long-term deal.
Expenses that have to be factored in are important as they directly impact cash flow. Equipment expenses are a one-time deal while software subscriptions can be paid annually or monthly. Tracking these in QuickBooks can allow you to see how much revenue you need to generate to be considered profitable on even the worst month.
