One of the biggest keys to a successful small business is the management of cash flow. If you don’t have enough money on hand to pay the bills when they come due, you’re in for a world of hurt. In order to avoid this situation, you must have a detailed budget for expenses, both those you know about and those you might incur. There are a ton of hidden expenses and dangers that could disrupt your cash flow if you’re not careful.
Shrinkage, for example is a huge problem for many small business. Whether it’s employee theft, shoplifting, or administrative errors, you should be sure to set aside some funds to cover for these losses. Employee turnover is another hidden expense. When employees leave and you must replace them, you have to put time into recruiting and training a replacement, which is expensive. You should also set aside some funds in case of a legal emergency. Small businesses are, unfortunately, often the targets of frivolous lawsuits. If one strikes you, you not only have to worry about settlement costs, but higher insurance costs and the loss of time tending to your business. Managing your cash flow well will lessen the impact of all of these issues and ensure you can weather the storm!
Read the full article here: 5 Hidden Costs of Running a Business