Bodies & bums cost money can you go virtual?

Ok, so an odd title for a business blog, but I thought that I would share this as I have just written it in a note for a board meeting where our MD is proposing her expansion plans for the coming year.

It is a startup business and the proposal is to increase headcount by 4-6 in Q1. This in itself isn’t odd however what so many new start businesses forget is the hidden costs of staff.
In this case:
Bodies
You have the recruitment costs. The salary, the NI & any other benefits (i’ll assume that you have worked these into your plan)
But have you factored in they are going to need:
A computer – Circa £800 with software
A telephone, extension & line – £80 a month??
Bum
Don’t worry i’m not talking about the extra loo paper or anything, but where are the new staff members going to sit & work?
Desk – £200
Chair – £80 at the least
Plus is there enough office space for this desk? If not has this been taken into consideration? That could cost £1,000, possible even £10,000′s

If you are in a serviced office there will be a standard cost per desk/user of around £150 in London.

So ask yourself this:
Do you need to see your staff?
Do they need to be office based?
Most importantly ask the question:
Do I need a human to do this, or is there a technology answer?

A lot of the time the answer will be no, but still ask the question and don’t forget if you are able to add an extra process or system or bespoke application to your business without increasing your head count and cost base then you have most probably increased your sale multiple on exit.


Richard Alvin

Richard Alvin

Richard Alvin has a number of investments across the media and fashion sectors. Entrepreneur of the year in 2014 Richard is also Group MD of Capital Business Media and SME business research company Trends Research, regarded as one of the UK's leading experts in the SME sector and an active angel investor and advisor to new start companies in addition to being the host of Save Our Business the U.S. based business advice television show.
Richard Alvin

http://www.richardalvin.co.uk

Richard Alvin has a number of investments across the media and fashion sectors. Entrepreneur of the year in 2014 Richard is also Group MD of Capital Business Media and SME business research company Trends Research, regarded as one of the UK's leading experts in the SME sector and an active angel investor and advisor to new start companies in addition to being the host of Save Our Business the U.S. based business advice television show.