andAcademic publishing, at the end of the day, is a business and, as such, can have hidden costs associated with it.
When we think about the costs of businesses, we often thing about things like overhead costs. These costs tend to be easily understood. They’re costs like rent or paper. These costs are usually broken up further into fixed and variable costs. Fixed costs don’t change, while variable costs will.
But what about hidden costs? What are these and how can they impact your journal?
What are hidden costs?
Generally speaking, a hidden cost is one that is not always clearly understood. They might not even be particularly obvious. They also may range from “trivial” to “substantial” in terms of how they can impact your bottom line.
For example, if we were talking about house ownership, you already know that you’ll need to pay a mortgage. You’ll also need to pay your hydro and water bills. Insurance is another cost that you’ll have to cover.
But what about ants?
An insect problem is not a cost that is immediately going to be on everyone’s list when it comes to costs associated with owning a house. But they can be a hidden cost. But what about your business? What are hidden costs associated with running a journal?
Well, what about ants?
Much like a house, businesses can also wind up having issues with pests that need to be addressed. These costs are difficult to predict, but will impact your finances. Many of the hidden costs that exist in home ownership can be translated over to running a business (though they are of course not the same). In fact, businesses have a completely different set of hidden costs associated with them that home ownership, for example, does not have to deal with. In this article, we’ll go over some of these costs, why they happen, and what you can do about them.
Common hidden costs in business
There can be dozens, or even hundreds, of different kinds of hidden costs when you’re running a business. While this might be the case, not all costs are created equal. Some cost more money, others simply aren’t that common. Our aforementioned ant problem, for example, is not a common occurrence. However, something like the costs associated with hiring and training new staff is. If a company has a high turnover rate (also called “churn”), the money that goes into training a new employee can quickly add up. Training costs can drastically impact your budget because they are difficult to track. Let’s look at an example of how training an employee can impact your bottom line:
You have an employee that has quit. In response, you have hired a new employee. This employee needs to go through a two week training period where they will be helped by a more experienced staff member to learn the role. During this time, your existing employee’s time will largely be devoted to getting your new staff member up to speed. This sounds normal, but at a basic level, this is what has happened: you went from two full time employees, a total of approximately 80 hours of work in a week. To one staff member training a new employee. If half the staff’s time is spent on training, your employee’s productivity is about 20 hours. You’ve lost 75% of your employee productivity due to the training period.
This example is non-specific. Companies might have shorter training periods. They might also have longer ones. But what is easily missed is that this time is time not spent processing manuscripts which impacts income. If your company has a high churn rate, you will be losing thousands of dollars over the course of a year, just in training staff to replace outgoing team members.
So, what are other hidden costs?
- Poor planning;
- Failure to adjust variable expenses;
- Workflow inefficiencies.
There are many more, but these are three major ones.
Poor planning
Poor planning can have a major negative impact on your budget. For example, if you are planning a open invite luncheon for “hundreds of people” and order catering accordingly, you might wind up paying thousands of dollars in food. What happens when only fifty people show up and you were expecting two hundred? All that extra food is going to be wasted, but it will still impact your budget.
Planning events (of any type) is critical to ensure that you do not waste money. When you’re a smaller company, especially, making events RSVP is a crucial way to limit your initial investments. You buy food for fifty people because that’s the number of attendees that you know are coming.
Another similar hidden cost is over-purchasing supplies. If you’re opening an office, and you need to buy furniture, you buy furniture for the number of staff members that you have now (not the number you imagine you’ll have in 12 months). While it is critical to plan for growth, making sure you’re growing is the most important part of the equation. It’s not just desks and chairs, but also how many pens and packages of paper you might need.
A line on a budget might read: “Paper”, but how much is spent on paper might be easily controlled by planning more carefully.
Failure to adjust variable expenses
Variable expenses come in many different sizes and shapes. This is why it’s critical to be aware of them. A carefully planned out budget is an important tool in this endeavour.
What are variable expenses? Well, some might be things like packaging and shipping costs. For a journal, it might be the costs associated with hiring English editors or the subscription costs that you pay for services or products associated with your business.
An example of a failure to adjust variable expenses when it comes to English editing might look like this:
You have hired a freelance editor. This editor is skilled and available, and so you pay them their asking rate of $0.03/word. Over time, they ask for more money, and in order to keep them available, you agree to their higher rate. Eventually, you find yourself paying them thousands upon thousands of dollars a month, and it would just be cheaper to offer them a contract to work for you full time at a salaried rate. Freelancers might not always want to work under salaried conditions. Many freelancers, for examples, are freelancers because they like the flexibility of their job. But there are many others who would love to transition over to a salary. Here, failure to carefully examine what these variable costs are has led to overpayment. Hiring a new editor, transitioning the editor to a salary, or using a service that includes editing as part of their suite of services, can help you to not overspend on these hidden costs.
All businesses should be careful with their expenses. While some of them cannot be controlled, others can be. Failing to control these expenses and to adjust them as needed is a common way for companies to waste money.
Learn how JAMS can help you keep your variable expenses in check.
Workflow inefficiencies
Workflow is complicated. The entire production workflow, start to finish, can have dozens of steps. Along the way, and over time, these steps might not be as efficient as they once were. For example, in the previous section we gave an example of how a variable expense like English editing fees can add up and become inefficient over time.
Being able to optimize your workflow is a critical way to avoid wasting time and effort (and thus money).
If you want to learn more about optimizing your production workflow, there are many different approaches that you can take.
Because there are so many different parts in the production workflow of a journal, identifying individual issues with a workflow can be challenging. For this, it is critical that you listen to your team and have them make recommendations. Even if you do not use recommendations, you might still be able to better understand what pain points your team is experiencing by listening to what they have to say.
Damages due to hidden costs
Not understanding where your hidden costs are can result in devastating impacts on your business.
At worst, these costs can add up and can lead to a journal not being successful. After all, even the best ideas need to be carefully managed in order to be successful. Academic publishing is a quickly growing field, but with so much potential competition in the field, making sure that you take every advantage you can is a good idea.