Running a successful business takes leadership, planning, financial know-how, and – usually – a little bit of luck. You can’t rely on any of these factors exclusively, though. Businesses that grow and thrive either have a leader who possesses all these traits or, more commonly, a leadership team that collectively encompasses these strengths. Even with all your bases covered, there are still hidden costs to doing business. Fortunately, though, an effective training program can help you mitigate some of these risks to your business.
With an unpredictable labor market, most industries are finding it harder and harder to recruit and retain quality employees. For small businesses especially, turnover can greatly impact customer service and your bottom line. Training reduces turnover’s hidden costs by empowering employees with skills and knowledge.
Small businesses can be the target of lawsuits, and often businesses are forced to settle even frivolous claims because the cost of litigation is just too high. Even if a settlement is small, it can increase your insurance costs and lead to bad publicity. By having comprehensive compliance training in place, you’re taking the first step toward avoiding the hidden costs of legal fees.
Equipment Repair and Replacement
Even when you think you’ve planned for everything, the equipment you rely on to conduct your business can also be a source of hidden costs. You may think you’re covered by service plans and extended warranties, but those won’t help you with costs related to down time, re-training, and customer service challenges. When your employees are well trained on how to use and maintain equipment, you’ll have fewer equipment related issues.
Shrinkage refers to loss in inventory or income due to factors such as internal and external theft, vendor fraud, or administrative errors. Employees and managers who are trained on loss prevention can help you minimize hidden shrinkage costs.
What price do you put on your time? If you’ve never calculated that, you’re forgetting about one of the biggest hidden costs for small businesses. Manage your time so that you’re focusing primarily on tasks that generate income and grow the business. Everything else should be re-prioritized and delegated.
More Leadership Insight
For more tips on how to be an effective leader, check out the leadership episodes in the Culture of Convenience podcast.