Extra costs that entrepreneurs usually forget to add to their business plan while starting a new business.

1. Time is money – Plan training of tasks and protocols for your staff

Starting a new company is not easy and delegating work is key to optimize your costs and profits. Staff can be very helpful to take care of some duties, but it can become very expensive if you need to review every single task they do.

To start a company with employees it’s very important to establish guidelines for every single role and tasks. If these are not clear it will cost a lot of working ours to clarify the work of every worker when they leave the company or just to have access to data if every worker saves the documents under their own criteria.  

If you want to create a company and don’t want to do mistakes on files organization here, are some tips for you.

2. Changing Staff

According to an Oxford Economic report, firing and hiring employees can cost up to £26,595.

This total consists on the costs of a recruitment process, which starts by the recruitment agencies fees or advertisement costs, costs of interviewing time, training the new employee and the timeframe where the position is to uncover until between 2 and 3 months when the new employee reaches its full productivity.

To find good employees takes effort and time but is worth it.

3. Long payment times

Many SME’s offer contracts allowing the clients to auto pay 90 days later, while the payment hasn’t arrived, SME’s must pay on time fees, taxes, loans, employees, etc.

This practice is very bad for a new company as it is impossible to reinvest the money in the company for the next client, it creates a financial gap that forces businesses to cover their costs with their own money. However, by reducing this to 14 to 30 days, incomes can be used to pay costs and to reinvest in the business.

If possible, if your company services allow you so, is always better to get a percentage paid in advance or at the beginning of the service offered.

4. Protect your idea

Many entrepreneurs may think they’re not creating anything special and there is no need to protect their project. Wrong! Every client can become a potential competitor if they believe they can do your business better, either if your business becomes successful or not, filling the claim when the intellectual property hasn’t been protected can be very expensive and take a very long time.

Our advice is while creating a new company, once you are sure about your trademark, hire a lawyer and get that done from the very beginning. Find lawyers here or if abroad find one here

5. Protect your data

After the new GDPR, if your customer’s data isn’t protected and end up in other company’s hands without explicit permission, your company may face very serious penalties even up to 500,000£.

Back to point 1, the staff needs to know the responsibility of managing the client’s information and how to store it safely.

Also, is very important that every single client agrees to your terms and conditions and specify on them what will happen to the client’s information, if it is going to be shared, if so under which criteria, etc.

Again, the best advice is to hire a lawyer to get good terms and conditions contract. As you will need it for your very first client, is important to have this on your checklist while the company’s formation.

6. Insurances for company formation

Imagine the worst-case scenario and add that as an owner you may have to face the costs of it.

Well this could happen, its uncountable the number of responsibilities that a company must to face if something happens, for example: if your branding falls off the wall breaking a tail of the street or hurting somebody, if your worker has an accident, if your product is damaged, all of this an many other scenarios can happen and will be the company’s responsibility, unless you have a good insurance to cover every single thing that could go wrong.

Find out the best comparison of insurances

7. DIY

Many SME’s believe they can do everything they need for the company, and it will save costs. Again time is money, if to save money you will do your own marketing plan and it will take you 1 week to learn everything about content, keywords, AdWords, etc, it may be better to get a marketing specialist to do all of it in less than one day and so you will get professional and reliable results.

Externalizing your business will increase your profit, and you are in the right website to find every service you may need to help you set up your business. LINK