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Hidden Costs That Are Wrecking Your Business Model

In business, it’s often the little things that matter. Companies that do things 10 percent better than their rivals tend to emerge and dominate an industry. 

For this reason, keeping a watchful eye on the little things is essential. Firms that keep track of every minor detail are those that are most likely to beat out their rivals and succeed in the long run. 

In this post, we take a look at some of the little overlooked costs that your business should be paying attention to. 

Employee Turnover

Businesses tend to focus on the cost of wages. Only rarely do they attempt to calculate the cost of employee turnover. 

Recruitment isn’t cheap. In fact, it can cost between 30 and 100 percent of annual employee wages to replace one employee with another. And for those fees, you aren’t getting any labor in return. 


Memberships are often necessary for small businesses. They need affiliations and associations with recognized industry bodies. Becoming a member of a larger organization adds to their legitimacy and makes them more attractive to customers. 

Unfortunately, these memberships are rarely free. Annual subscriptions can run into hundreds or even thousands of dollars. 


Logistics are another small item cost for most firms that they overlook. It’s easy to just dump the odd shipping fee into “miscellaneous” spending and just forget about it. 

Don’t accept the first quote you get. Instead, use tools like Unishippers freight shipping calculator to work out exactly what it’s going to cost. This way, you can ensure that you get the best possible deal. 


Shrinkage, also called loss of inventory, is another major bugbear that can set businesses back without them even realizing it. 

From an economic perspective, shrinkage is identical to theft. It’s an outright loss. Unfortunately, you can’t insure against it

How you minimize the problem is up to you. One option is to store all valuable items in a secure area which only a handful of employees have access. Another is to install surveillance cameras so that you can see precisely what staff are doing at all times. You can also join insurance partnerships that can consult with you about how to minimize your risk. 

Poor Use Of Supplies

The various supplies that your business uses might be cheap, but they aren’t free. Display signs, stationery, notepads and so on all cost money. If staff have a throw-away attitude towards these, then your costs can spiral rapidly. 

Audit your supplies and ask yourself whether you really need to order so many. Take measurements of how many employees use during daily operations. You’ll often discover that you are demanding far more than you actually need. 

Ask How People Are Spending The Time

Lastly, you’ll want to check precisely how people are using their time in the office. Try to find ways to make them more efficient. Avoid paying for labor that isn’t productive wherever possible. Reduce distances between workstations and give employees tools that let them automate time-consuming and repetitive tasks. 


Edel Alon
Edel Alon
Edel-Ryan Alon is a starving musician, failed artist, connoisseur of fine foods, aspiring entrepreneur, husband, father of two, geek by day, cook by night, and an all around great guy.


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