The cost of living is going up for everyone, especially for small businesses. It’s now more vital than ever for businesses leaders to be mindful when finalising their budget so money isn’t squandered on unnecessary expenses. And yet, according to research by AXA Business Insurance, businesses owners often underestimate the costs of various elements of their businesses, leading to nasty surprises when their statements come.
The biggest shock to small business leaders was the cost of salaries, which 33% of business leaders surveyed stated as their biggest shock cost. Next came keeping the fleet moving; 13% of business owners felt fuel prices were their biggest surprise expense. Other costs that raised eyebrows were stationary and printer ink, generating gasps for 13% of owners. Another 9% felt that phone bills were the expense that always ran to more than anticipated and 6% found their biggest shock to be the amount they spent on postage. These costs are all part and parcel of business ownership but can often be overlooked by those not keeping a close eye on the purse strings.
“Little things can cost a lot and even if you have the best of intentions for your business budget, it’s amazing how quickly unexpected costs stack up and start biting into your profits,” said Darrell Sansom, managing director of AXA Business Insurance.
One of the most surprising findings of the report was that 32% of leaders surveyed admitted that they seldom shop around for the best price and quality. In light of this, whilst Sansom feels businesses need to appreciate the clear benefits of paying staff well and not skimping on quality materials, he also advised that it’s essential to balance the costs of certain components with the need the serve.
“Carefully monitoring and controlling all expenses is essential and reviewing costs and switching brands or suppliers on some of those seemingly small things could soon see the savings stack up,” he adds.
Evidently then the old adage is true; look after the pennies and the pounds will look after themselves.