Keeping control over a growing business can be difficult, costs can spiral out of hand, cashflow may suffer and so may profit if you're too busy to take note of what's going on.
Here are some common mistakes I see and some tips to help stay in control.
Too many "mates' rates". I hear this one a lot, and sometimes doing favours can cost you more than you thought. Do your friends and family have expectations of getting a good price from you? If they approach you for work, make sure you set some terms.
A good way around this is to develop a friends and family discount policy on your retail price and let them know this before you do the work. They still get some sort of deal and you're still doing smart business that will resonate at social functions in the future.
You need some help but are not sure how to control the cost of labour. More often we're seeing piece rates in projects or jobs. This is where a contractor may do work for you at an agreed percentage of a total contract or job.
This can help to fix your labour cost on a project. Although this may sound easy, you'll need to make sure you have some good terms and quality controls in place as well as a decent contract.
If you think your costs are too high shop around, just remember every service might not be the same so don't just shop for cheap, make sure you get value for money.
Ask your business friends for referrals — theyre usually the best source of quickly finding the right help. Other examples of costs you can have some control over are ACC with ACC coverplus extra, vehicles and fuel with service agreements and fuel cards and of course lending with your bank.
Although some of these might seem small remember over the lifetime of your business they'll add up.
Jeremy Tauri is an associate at Plus Chartered Accountants.