Released new Small Business Growth Calculator to help small businesses estimate the cost of scaling their business

Released new Small Business Growth Calculator to help small businesses estimate the cost of growing their business

• Fintech lender iwoca has created the Small Business Growth Calculator to help small business owners get an estimate of the costs involved in scaling during these uncertain times.
• Companies looking to increase the size of their workforce over the next year will need to budget around £36,000 per employee.
• According to a new calculator, if a company wants to make another £100,000, it will need to allocate about £10,000 to marketing.
• A scaled-up company could pay upwards of £2,000 in transaction fees for every £100,000 made from card sales in the next year.

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[September, London] – iwoca, one of Europe’s largest small business finance companies, has announced the launch of the Small Business Growth Calculator, a tool that allows business owners to estimate the investment needed if they want to expand their business.

2022 has been an uncertain year for many small businesses. With both the cost of living and the cost of doing business rising, many are understandably wary of taking risks. But with the announcement of government support packages that clarify what to expect with energy prices, business owners can start thinking about where to spend their money for those planning to grow.

iwoca’s calculator takes into account overhead and operating costs, from hiring needs to marketing costs, to provide a personalized estimated cost for small businesses to scale. It also accommodates inflation (at the current rate of 8.6%).

Hiring is the highest cost of scaling a business

A major challenge for small businesses looking to scale is hiring and retaining employees. In the current financial situation, it is important for small businesses to ensure that their employees are paid competitive salaries that can cope with rising costs of living and attract new hires to scale their businesses. Budgeting is essential.

With the average UK salary of £31,285 and mandatory national insurance, employee pensions and employers liability insurance of £4,565, SMEs can afford to hire full-time employees as they scale. You should budget just under £36,000 per member. If the company also has to offer a work-from-home setup and potential co-working spaces, this could be even higher: £37,780.

Hidden costs that small businesses may not be aware of include transaction fees, insurance premiums, and legal fees

Small businesses may need to budget around £14,000 per 300 square feet of retail space and £20,000 or more per 100 square feet of storage space.

Small businesses that need retail space to scale may need to budget £13,678 per 300 square feet. This price also includes utility and energy costs, but growing businesses must consider changing economic conditions coupled with rising energy prices. If your growing business is on a tight budget and can operate online, it may be more cost-effective to forego retail space.

The space a business needs depends on its sector and size. But if you need extra storage space to scale, you can rent it for an average of £1,680 per year for every 50 square feet, or he can buy it for £20,471 for every 100 square feet.

Growing businesses must book transaction fees of at least £2,000 for every £100,000 earned from card sales

The majority of businesses sell via card payments, which are subject to transaction fees. For every £100,000 of his that the business earns from card sales, a fee of £2,150 has to be paid, which can have a significant impact on overall revenue over time.

Sherrill Sharp, accountant and small business owner at Pink Pig Financials, said: “This is a great tool to get business owners thinking about costs in these uncertain times. It helps in estimating the

Colin Goldstein, Director of Commercial Growth at iwoca, said: “This is a tough time for small businesses across the country, but there are still many that see significant growth opportunities.

The various relief schemes recently announced by the government are very welcome and will help small businesses in the short term. But we hope iwoca’s scaling calculator will also help you decide where to allocate your spending and maximize the exciting opportunities at hand. ”

Companies must allocate £10,000 to marketing for every £100,000 added.

Another big expense small businesses should budget for is how they market their business. Marketing, which includes social media, PR, and branding, is essential to building brand awareness, increasing sales, and a necessary communication for any company that wants to scale effectively. According to iwoca’s calculator, small businesses should consider allocating 10% of their desired revenue to marketing.

The following table shows how much money a small business might spend on different elements of their business to scale effectively.

About IWOCA:

iwoca is key to economic growth by expanding the financial possibilities available to small business owners. Since launching in 2012, he has provided over £3.5 billion of his capital to 70,000 companies and raised over £500 million in equity and debt.

We provide loans, payments and invoicing solutions for small businesses across all industries. For more information, please visit www.iwoca.co.uk, like our Facebook page and follow us on Twitter. @Iwaka and Instagram @iwoca.