If you’re running your own small business, you’ll quickly find that overhead costs can quickly emerge as a serious problem. Typical overhead costs for a business can range from things like utilities and rent, to marketing and office supplies – all factors that are standard in running a business.
While the costs of operating your business might be essential to keeping everything running smoothly, they can also start to cripple your budget if you don’t know how to manage them properly. Fortunately, if you’re one of the many businesses struggling to weather tough economic circumstances, there are methods that you can use to trim your overhead costs.
1. Review Everything You’re Currently Doing
The first step in reducing your overhead costs, is to review everything that you’re paying for. If you need to, ask your bookkeeper for access to financial records, and go through the list carefully, looking for anything that is taking a significant chunk out of your monthly, quarterly, or annual budget. You may find that there are some items on the list that are no longer necessary, or supplies from third-party contracts that you could get for less money elsewhere.
2. Go Paperless
By this point, almost everyone has gone paperless in an attempt to save money, and help the environment. Without paper, you cut down on clutter, while avoiding extra expenses for printing. Instead, you simply store any crucial documents on disks, or the cloud, sign contracts electronically, and email your clients to keep in touch. With less need for filing cabinets to store all of your paperwork, you might even find that you can move to a smaller office!
3. Hire a Bookkeeper
For many small businesses, the concept of a bookkeeper seems like a luxury that they simply can’t afford – but it really is worth the expense. These professionals can help you look over your taxes in detail, and keep track of your cash flow, so that you can make informed decisions about the growth of your business, and stay away from potential penalties caused by overlooking a few important numbers. What’s more, these experts can also help you find deductions that you wouldn’t have thought of yourself!
4. Maintain the Right Team
If you’re looking to hire a new employee, try to make sure that you hire someone who’s going to give you the best bang for your buck. For example, advertise for a sales rep who also knows how to craft press releases on your behalf and check on your marketing efforts. From time to time, you could also invest in professional development courses for your team to reduce the time and money spent on turnover.
5. Cut down on Space
If you’re running a small business, then you shouldn’t need a lot of space. In some cases, you might even find that you can give up your office and move into a telecommuting business model instead. Think carefully about how you’re using your space, and whether you might be able to save money by running your business in a different way. If you really need real estate, renting is often cheaper than buying.
6. Save on Energy
Another tip that’s good for the environment, saving energy will help to cut down your utility bills, so look for ways to become more energy efficient – whether you’re running your business from the office, or at home. Insulate space to reduce cooling and heating expenses, and purchase devices that use as little electricity as possible so that you can put the left-over cash in your budget towards something that is more lucrative for your business.
Think you’ve covered all of the areas in your business that might be losing money? Try getting an opinion from an outside perspective. Speaking to your employees, and other staff members can help you to get an alternative insight into how your business runs, which may shed light on some expensive areas you missed in your initial review.
8. Create Brand Ambassadors
Finally, one of the most expensive things about running a business, is marketing yourself. Instead of paying out excessive amounts of cash for new marketing strategies every couple of months, work on turning your clients into brand ambassadors that will advertise your company on your behalf. Word of mouth remains to be one of the most essential tools for marketing success in the modern age, so make sure you focus on creating satisfied customers.
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