You have a business plan, a marketing strategy, your premises, licenses, registrations, stock, employees; you’ve thought of everything and you’re ready to go. Now is the time to take a step back and think about whether you really have thought of everything, because there are some nasty little surprises waiting for the unwary. Your contingency funds may cover an unexpected and unbudgeted drain on your finances, but why risk it? Be prepared for the things that can cost you money and retain a grip on your budget.
Theft
Unfortunately, theft is an ever-present problem that can cost you dearly. If you are in retail, you will probably have thought about security measures on the shop floor, and there should be an allowance for losses in your financial plan. Customers aren’t the only source of this kind of loss though, and although it might be an unpleasant thought, staff theft is a very real and very damaging problem. In large organizations, whole departments are set up just to tackle staff theft and fraud, and the truth is that even if you have a small business with a handful of employees, you can never be sure that one of them won’t have sticky fingers. Your losses may only amount to a few pens and notepads here and there (although that will have an impact on your stationery budget), or you could be unlucky enough to have someone who helps themselves to items of stock, or your takings. Fraud is a more insidious crime; you don’t know there is a loss because the fraudster covers their tracks, but their actions are affecting your profits nonetheless.
Damage and replacement
You should have calculated a figure for depreciation and replacement for your stock and your equipment, so you may think this is a cost that is already in your budget. However, this kind of expense is not entirely predictable, and you could find you have to replace or repair more items than you expected. You may need to replace things more quickly than you planned to because of new technologies, or tools that don’t last the length of time you anticipated. If you want to find out more about these kinds of costs, there are services like overheadwatch.com that can provide information and assistance.
Staff
Your employees are essential to your business and should be valued and respected. Nevertheless, they can be a drain on your finances without ever intending to be. Staff who move on need replacing and the new employee will need training and investment to flourish in their role. If you have a member of staff who falls sick and is unable to work for extended periods, or if one of them becomes pregnant, there will be sympathy and congratulations respectively, but you will still have to cover the workload by getting temporary staff.
You may be lucky and have the most honest staff in the world, who never get sick and can maintain maximum productivity using outdated computers; but it’s not likely. Hope for the best for your business, but it doesn’t hurt to prepare for the worst.