Planning for your business in the long term is a surefire way to success, but it also means you’re going to watch that cost margin go up and up. You’re approaching your business as a project, and going for longevity over being a short term hit, and so it only makes sense for you to start getting worried about your budget.
However, as long as you know the big costs of long term business planning, you’ll be able to prepare accordingly, and take on the expenses that will be racking up over the coming months. Be sure to read through the points below for an idea on where to get started with these.
Storage Costs
If you don’t have enough room in your own storeroom, or your own office, you’re going to have to fork out for storage elsewhere. Depending on how much you sell day by day, and when your orders are put in and delivered, you could only need a small storage unit or an entire warehouse to keep your stock safe and secure.
In many cases, such as an Amazon Warehouse, you’re going to need to pay by square or cubic feet, so be sure to get to know average prices, what constitutes a small, standard, or large item, and how long you’re going to need storage for overflow or excess stock. It’s good to know when to cut your losses, in order to save money in the long term.
Fleet Costs
If you’re going to be running a business that owns and operates motor vehicles, even in the smallest of ways (such as commuting to and from work), you’re going to need to fork out for a fleet.
One of the biggest costs of owning a company fleet is the insurance on these vehicles – be sure to compare the price of a traders policy before you settle into a contract with any provider out there. Similarly, you’re also going to have to pay for fuel reimbursement, based on the receipts your employees submit to you on a monthly basis; it’d be good to issue strict guidelines surrounding submissions and to offer a time frame on when and how money can be reimbursed.
Labour Costs
And finally, keep an eye out for your company’s labour costs. They can be the worst expense currently in your profit and cost margins, and they’re going to only rack up over time. The more people you bring in to work for you, as well as accounting for pay raises and promotions, the more extensive your payrolling duties are going to be. Both time and money are precious commodities here, and you could be using up to 70% of your resources dealing with payroll each and every month.
Long term business planning is essential for operating a company for longer than a year, but it’s going to cost you. Make sure you know where the money will go, and how often you’ll need to account for it.
