5 Things Nobody Tells You About Expanding Your Company
Most entrepreneurial advice on the internet cater to entrepreneurs who are just starting out. Entrepreneurs who are just starting out need a lot of help and direction, so it’s much easier to guide them. But what about people who are on their next step of growth? As these people are likely to be experts, there are much fewer resources dedicated to them.
In truth, everyone needs some degree of advice and support. If you’re thinking about expanding your company, you likely need to add new systems and processes that you haven’t even heard of yet. Growing a company is just as difficult as establishing it, with the caveat that you also have a number of employees depending on you for their salary. So what hidden costs or expenditures should you expect?
When adding up the cost of expanding, don’t forget to reassess how much insurance you are going to need. You will need to give new employees insurance, you have to upgrade your business insurance, and you also need to ensure your new offices as well. There is a lot of these costs that you cannot avoid paying.
It is best to sit with your accountant and figure out about the increase. You don’t want to be caught not giving your employees insurance or cutting corners here. Insurance saves you money in the long run, it fosters a great work environment, and employees who feel supported by their work have high productivity as well. So make sure you have enough saved up to invest.
More offices mean more employees and larger offices. With an expansion, walking around the office to talk to each other may not be an option anymore. It would waste time to have people walk to different floors to sign off on documents or discuss a client. Instead, you should invest in a reliable SIP trunk.
SIP trunks are inter-office communication systems that are routed over the internet. They are a type of Voice over Internet Protocol or VoIP phone systems. This means you aren’t paying the phone company for every 30-second call an employee makes. These systems provide 24x7x365 connectivity, ensuring you are never more than a call away.
Software Licenses or Contracts
Most software licenses or contracts are drawn up for a certain number of employees. These contracts usually have an upper limit for the number of people they support, allowing for a small degree of flexibility in terms of expansion. However, if you’re planning a significant expansion, these contracts will need to be re-negotiated.
When you’re planning your expansion, make sure you know the number of new people you’ll be bringing on board. Check how many new people will be using licensed software as part of their key responsibilities and factor that cost into your budget. You can often get discounts here if you have a good relationship with your vendors.
Maintenance Costs and Utility Bills
Larger offices mean higher bills. As your floor space increases, your maintenance contract will need to be re-negotiated. Many people don’t take this cost into account when planning their expansion and end up paying thousands of dollars in maintenance costs out of budget. This can quickly eat into your profit margin.
You will also need to pay a higher amount of utilities. More business also equals an increased need for connectivity, air conditioning systems, light bulbs, and more. As a business owner, you have to front the costs for the most minor things, including carpeting. Remember that your company is still a business and will need these basic amenities.
There are many expenditures that your business currently writes off as miscellaneous expenditures. Food for occasional office parties, office supplies, rare traveling costs – these are just some of the things that your company pays for that are part of business operations. These are necessary to keep up morale and, in many cases, essential for your employees to cater to a client’s demands.
As the number of people who work for you increases, these costs will also increase. Ask your account for a projection of how much your miscellaneous costs will increase, and make sure you budget for this. Otherwise, you’ll end up bleeding money after your expansion and be unable to figure out how to plug the hole! Because these are filed under ‘miscellaneous,’ these can be difficult to track. Estimate a higher amount than needed to be safe.
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