Your Business is Growing. Now What?
Your business is finally growing and everyone is excited about all the new possibilities. Every business that experiences growth will find that it is an exciting time and also a fearful time. For some it may even be the first time that they have faced growth and may even be unaware of the hidden costs and dangers of it. As your business grows there will also be an increase in the cost of running the company. Having a good understanding of the hidden costs and managing business growth can help you and your business weather the struggles.
Unexpected Infrastructure Costs
There are several things that can lead to extra cost when it comes to growth. One that often takes owners by surprise is infrastructure. When you think about infrastructure usually the building and the land comes to mind, but it is also the devices that help your business operate on a daily basis.
Space is the most obvious problem that you will face.
You will find that you will need more square footage to house the extra items for sale. For example, let’s imagine that a retail store has had a great year in sales and can now offer more choices to it’s customers. They will need more showroom space for displaying more merchandise. The hidden costs are seen in increase in rent.
Another part of infrastructure comes in the form of electronic devices needed to run the business. These devices include computers, printers, copy machines, scanners and any other devices used to record information. The hidden cost of electronics comes when you have to upgrade or buy extra devices in order to handle all the extra business.
Infrastructure also includes the shelves and containers that are needed to store all the extra merchandise. If you are in the retail business, then you may need to purchase extra display shelves to showcase all the new items you can now offer to customers.
The Hidden Cost of Extra People
There comes a point in the life of any business when size becomes an issue. It is that point when one person can no longer handle all the details of sales and marketing. They find themselves running out of time to get everything done. To solve this growth problem the company will hire new people to perform certain jobs so the owner can get back to growing and expanding the business.
New employees bring in a number of new costs. The number one cost is salaries. Some companies find it easier to hire the services of a payroll company to handle all the printing and distributing of checks to their employees.
Another cost of having employees is the need to provide employeebenefits. These are the perks that people look for when deciding where to work. Providing benefits such as health insurance, retirement accounts and many others come with a cost that only the owner will have to handle. Most people do not understand that even though health insurance costs workers a premium each pay period; it costs the company even more to offer and cover some of the cost to the employees.
The Importance of Growing at a Steady Rate
Growing your business is an important goal for every owner. The problems of hidden cost should not scare you from growing your business. Businesses need to grow at a constant and steady rate so the hidden costs of growth do not overwhelm the business owner.
Having a well thought out growth plan will help you grow in a controlled manner.
Contributed by Drew James