The True Cost of Running a Business - William A. Maloney Sr.

 

Many business owners are surprised to learn that there are many hidden costs to running a

business. Unfortunately, they most likely learn about these additional costs after they experience

the frustration of managing their business day-to-day. Here is our detailed list of both the o

bvious and hidden cost to running a business. Business owners and company executives must

develop strategies to deal with each of these cost issues to avoid wasting financial resources.

 

Understanding the True Costs of Running a Business

 

VISIBLE COSTS

·          Salaries

·          Benefits

·          Overtime

·          Customer Complaints

·          Consultants

·          Special Overhead Costs

·          Equipment Costs

·          Maintenance Costs

·          Inventory and Supplies

 

 

HIDDEN COSTS How much are hidden costs, costing you?

 

·          Lack of Employee Motivation

·          Excessive Employee Turnover

·          Lack of Clear Business Purpose and Strategy

·          Sick Pay

·          Ineffective Employee Relations

·          Lack of Clear and Consistent Policies and Procedures

·          Training and Developing Administrative Errors

·          Billing Errors

·          Theft

·          Disability Pay

·          Waste

·          Poor Processes

·          Inadequate Staffing or Overstaffing

·          Ineffective Performance Management

·          Inefficient Systems (Management and Operational)

·          Low Productivity

·          Grievances

·          High Account Receivable

·          Equipment Downtime

·          Lack of Proper Equipment

·          Injuries

·          Employee Frustration

·          Ineffective Public Relations

·          Lack of Clear Vision and Mission

·          High Insurance Costs (Worker’s Comp)

·          Lost Customers

·          Inadequate Staff Development

·          Poor Internal Communications

·          Fear of Litigation

·          Low Inventory Turnover

·          Distribution Delays

·          Lack of Technical Skills

·          Poor Image in the Market Place

·          Management Frustration

·          Owner/Investor Frustration

·          Poor Management Practices!!!