When we start a new business, there are a lot of costs that jump out at us immediately. We think about the equipment. We think about employee salaries. But we don’t always think about all of the administration costs. These tend to be a lot of little costs which, when put together, form to create quite a staggering whole. In short: administration costs are always more than you think they’re going to be.
But the problem people have when they start a new business is that they don’t bare this in mind early enough. By the time they start working to reduce these administration costs, they’ve already wasted a lot of money. And when you come to realize just how much money can be spent in total on administrative duties? You’ll see that not handling this area properly can be devastating for your business.
You should be saving wherever you can, as long as you’re not compromising too much on the quality the end consumer sees. So start by keeping these things in mind when it comes to the cost of admin.
Rent vs buy
It can be very tempting to get a big business loan and splurge it all on a big office. An office you now own. It helps your business feel more secure, more official. This isn’t just office space – it’s the office of your business. But you need to be careful.
While many people say buying is better than renting, this isn’t always true. Unless there are pressing business reasons that mean you have to outright own the space you work in? I would suggest going with renting instead. It will cost you a lot less in the short-term. And, with the way property prices are these days, it may even save you a lot in the long-term.
When we think about payments in business, we think about getting paid. And when we think about that, we imagine numbers rolling into our bank account, always on the rise. But payment doesn’t come to us for free, I’m afraid.
Sometimes, the handling costs that payment processing companies charge can be egregious. It brings a whole new sense of literalness to the phrase “gotta spend money to make money”, doesn’t it? This is why you need to be careful when it comes to browsing merchant services. Some can offer you very good deals when it comes to payment processing.
Administrative costs break up into loads of little sections. One of those sections is utilities, which itself breaks up into lots of other sections! You have electricity, water, and Internet expenses to think about.
Water isn’t always that much of a worry for modern businesses, especially in office-based jobs. But Internet and electricity are different beasts altogether. They’re the lifeblood of modern work. You need to find the best deal on business Internet you can instead of going for the most famous name. (That doesn’t mean you should skimp on speed, though!) You should also be looking into ways to save on electricity. As any homeowner knows, these costs have a tendency to build up and surprise you!