Costs You Might Not Calculate When Running Your Business

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If you are taking your business seriously, it is important that you get the facts right and find out exactly how much you earn carrying out your activities every hour. Some people, however, make a mistake not working out the regular fixed and variable costs of running their business, and only start thinking after they realise they are making a loss instead of a healthy profit. Below you will find a list of things you might not have been thinking about.

Client Entertainment

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That coffee you pay for when meeting customers, the gift cards and promotional materials or gifts you give them all add up. You need to first make sure that you are earning enough per customer, before you would be able to decide whether or not it is worth it. Not to mention meeting with prospects you will not turn into paying clients. You can use an accounting app to work out the worth of each client, so you can decide which type of customer you should focus on.

Cost of Obtaining a New Client

You might think that it is straightforward to work out how much it costs you to get a new customer, but really it is complicated. You paid for your website they landed on, might have invested in an eCommerce software, and are paying for your online advertising. This cost will also depend on the effectiveness of your sales funnel and your conversion rates, so track your leads and conversions using an advanced CRM system.

Time Spent on Proposals

You are not likely to consider the time you spend creating client proposals and sending them to them, the phone calls and Zoom conferences, however, these are all important in your business, and take time away from doing something else. If you really want to know how much you are earning per hour, you will have to track your time using the simple Pomodoro widget and assign time to each customer.

Car Maintenance and Fuel

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Another cost you will not be able to record on your tax return is the cost of fuel and car maintenance. While you might have a mileage allowance, you can certainly not put down MOT repairs as a cost, unless you are using your car solely for your business. If you feel like you are not getting enough miles out of your car, you might want to talk to an expert at Liverpool Car Centre to find a more economical set of wheels.

Memberships

If you are involved in networking, you might have to pay for your membership and meetings. You have to figure out what you are getting out of the activities, and whether or not it is financially feasible to pay for the exposure. What happens if you are ill and working for yourself? You cannot send someone else to represent your business, and you will end up wasting money.

When you run a business, it is hard to separate your private and professional expenses. Focus on these hidden costs to optimise your profits.