Growing your business can be a difficult – but rewarding – challenge, in of itself.
But growing your business doesn’t come cheap; did you know that it could cost you in more ways than one?
Most Aussie business owners realize these four hidden costs too late into their growth spurt, and this can cost them dearly.
From new team members to time loss deficits, we’ve compiled the biggest hidden costs with growing your business and how to navigate them!
Hidden Cost #1: New Staff = A Huge Time Commitment
The most obvious cost associated with scaling your business is needing to take on new team members.
This happens because the only way to grow is to acquire more work or more clients – usually both. Which in turn means you need new team members to handle the increased workload.
A case could be made that you could try to acquire fewer clients, but ones that pay more.
Typically, however, the higher paying the client is, the more detail oriented they are and the more work they expect from you.
Therefore, it is simply inevitable that as you grow, so too will your staff.
How To Deal With This Cost:
Although new team members can quickly eat up your profits via full time salaries, they are unique in that they will usually return your investment over time.
This is achieved through handing off of responsibilities to them. Over time, your new staff will even grow your business for you!
In order to reach this point early, ensure an onboarding system is in place to get them up to speed. Onboarding is typically the most time consuming part of hiring, after all.
Cost #2: Your Growth Spurt May Require A New Premises
As you acquire new clients and a bigger staff, you’ll need somewhere to bring them all together: a new office.
This goes hand-in-hand with your growing reputation, too: many prospective clients will perceive a bigger office as more successful. (Although, this may not always be the case.)
However, rental fees can quickly cut into your profits if left unchecked.
How To Deal With This Cost:
Ensure – beyond all shadow of a doubt – that you can afford to pay the office rent for three months if in the worst case scenario your top three clients were to leave.
This will help you understand if you’re ready to upgrade your office and avoid overextending yourself financially.
You’ll also want to ask yourself if you really need all the space that the office has to offer. Make sure you’re not renting an office just because it looks good to your clients.
Cost #3: The Time Cost As Business Owner
You should never discount the cost of growing your business just because some parts don’t cost money.
As a business owner, cash takes a backseat to your most valuable asset: your time.
You’ll be taking on more responsibilities & more skills you need to learn to grow your business further.
Plus, you’ll especially need to manage these hidden costs you’ll be taking on.
How To Deal With This Cost:
Consider hiring a middle or upper management team early on in order to delegate more of your workload.
At the end of the day, you can’t do everything yourself: it may not be perfect – it may not be the way you want it – but giving tasks to your team frees up your own time.
Otherwise, you’ll need to learn to set boundaries for when work finishes and personal & family time begins – it’s too easy to fall into a never ending cycle of work!
Cost #4: New Departments Are Sure To Spring Up
As your business grows bigger, you’ll need to pick up new departments to facilitate your growth and ensure all policies are being met.
Common departments include:
- HR department
- Legal teams
- Payroll managers
- IT specialists
- Sales teams
- Administration staff
These departments – and plenty others – are ultimately necessary to run a medium to large scale business and ensure everything works smoothly.
For example: as your team grows, you’ll more than likely be spending the majority of your time on training and managing your new staff, as well as ensuring all HR policies are being met.
How To Deal With This Cost:
The path of least resistance is your best bet here: accepting the fact that these departments – or outsourced options – are necessary will bring you one step closer to implementing them.
Then, once they’re all up and running, you can get back to growing your business with even more productivity!
Avoid These Hidden Costs With The Help Of An Accountant
So, now you know that scaling your business is just half the battle; the other half is managing the expense of growing!
But, all this isn’t to say that you shouldn’t try to scale your business.
In fact, now that you know which expenses to avoid and how to deal with the necessary ones, you should have a good chance of succeeding.
But what if you could increase your chances of succeeding even further?
By hiring a registered bookkeeper and accountant from The A Firm of course!
Book a free meet and greet with us today!