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It is wise to write a comprehensive business plan when starting a new company. Note that there are a number of extra costs that, if not accounted for in your business plan, could sink your venture. kinex asks; what are the biggest hidden costs UK-based small to medium-sized enterprises (SMEs) should consider when starting out?
According to Small Business, 53% of UK small companies are owed late payments, with 67% saying that this is forcing some SMEs to close down. It is wise to implement provisions to cover expenses in the eventuality of late payments, so your business has a back–up stream of operating capital. Using your financial forecasts, estimate how much capital you will need to put aside to survive and pay off overdrafts and loans while awaiting late payments.
As you grow, you may need to replace members of staff and this can prove expensive. Figures from an Oxford Economics report commissioned by Unum, a benefits specialist, show that replacing a single employee can cost over £30,000. It is key that you invest in a quick yet efficient recruitment process to limit hiring costs when starting a business. Also, devote funds to training new recruits with the essential skills they need to thrive in your office, so you do not have to re-hire later down the line.
It is key that you safeguard your business’ productivity rates at all times, as productivity issues limit an employee’s ability to work effectively. Speaking to The Telegraph Tim Oldman, the CEO of think-tank Leesman explains: “Worryingly, just 54% of employees agree that their workplace enables them to work productively.” Maximise productivity by offering employees a range of different tailored-workspaces, so staff can flourish in environments which suit their working needs.
Your company’s intellectual property (IP) is one of its most lucrative assets. Fail to safeguard it legally and competitors could utilise your IP, depriving you of business. Commenting on the importance of IP, Head of Competition Law of law company Bristows Pat Treacy was quoted by Real Business saying:
“Registering IP need not be expensive, and can save a great deal more expense and heartache later… If someone steals your trading name, product name or ideas they are in effect stealing the heart of the value built in the business.” Check out Gov.UK to find guidance on how to adequately protect your business’ IP, ensuring you can create stable revenue stream.
Under the Data Protection Act you have a legal obligation to follow strict data protection rules. Failing to adhere to these regulations can prove costly, meaning that if you breach this Act you could face fines of up to £500,000. When compiling cost plans, account for the expenses attached to implementing data protection training for your staff and installing the relevant software on your business’ devices, to prevent your company from mishandling sensitive consumer information.
When safeguarding data, it is vital that you install rigorous internet infrastructure in your office to ensure you do not fall foul of the Data Protection Act. We would suggest that you invest in first-rate broadband services, such as those offered by kinex, to ensure that this hidden cost does not prevent your business from capitalising on revenue inflows to promote growth.
kinex specialise in looking after you – Britain’s small businesses. We supply all the essential services you rely on at a price you like. And one bill makes the whole thing simple. You get a reliable partner and honest personal service from a team that’s keen to help.