What are some of the lesser-known costs of expanding your business?
Expansion can be one of the most exciting elements of running a business, as it means that your business model is working and that you will have a chance to grow your profit potential. That being said, it can also be fairly expensive, so it is imperative that you have a good idea of how much your expansion plans will cost overall. Some of the main costs include hiring more staff, purchasing stock and buying equipment. There are, however, some less obvious costs. Here are some of them.
Sometimes there are legal considerations to make when expanding your business. Some of these might include buying property and keeping accounting and tax in order, amongst a host of other possibilities. It is well worth getting a quote or advice from a professional firm like Withers so that you can factor any legal costs into your expansion budget.
Those business owners which fail to consider the legal aspects of business expansion may well face troubles further down the line, especially if they run into any troubles in areas like accounting.
In industries like retail, storage space is incredibly valuable, given that products will be going in and out of the shop constantly. When your business first expands, it is hard to tell exactly how much custom you might receive, and thus how much storage space you might need.
If your new business venture does better than expected (so much so that you need to store more products) you will no doubt end up having to invest in more storage space, and fast. This could prove to be very costly given that you will have limited options when buying space (such as a warehouse) quickly, so it is best to be optimistic when choosing the amount of storage space you invest in.
Whilst your business may be a success prior to expansion, running a new branch or advertising any new offerings may well feel like starting again from scratch. You will need to use effective marketing methods to let potential customers know about your expanded business.
These will vary from business to business, as will the price of each, so be sure to think about how much you want to send on reaching out to potential customers come expansion.
These are some of the potentially lesser known costs which you may encounter if you are expanding your business. Be sure to shop around for each in order to get the best prices, and your newly expanded business will have optimal chances for success.