Scaling up a business usually means increasing operational costs, but is it possible to lower non-variable overhead costs like office rental? Nike, Inc. has cut costs many times throughout its history, and today ranks as Oregon’s largest public company, according to Zippia. If your small, medium or large-sized business is planning to scale up, you have several options such as running a business online. You can also maximize growth by lowering various fixed monthly bills including mortgage, tax, telecom, and insurance. So, how can companies scale up while lowering fixed overhead costs? Here’s what you should know.
Hammer out Mortgage Interest Rates
Expanding your company could require building a larger building. Commercial real estate loans in Oregon can be as low as 3% based on factors such as the real estate being purchased. Like personal loans, you can often negotiate business loans. When this option is available you can lower overhead costs by negotiating lower mortgage interest rates and better terms. Lenders are sometimes willing to adjust several parts of real estate loans. This includes interest rates, certain fees, and discount points. Related factors should also include your company’s borrower profile and credit score.
Deduct Applicable Portions of Property Tax
Smart Asset reports Oregon’s average property tax is 0.9%, which is slightly below the USA’s national average of nearly 1.1%. The Internal Revenue Service (IRS) says that companies can deduct a portion of their property tax that’s based on the property’s “assessed value.” On the other hand, you can’t deduct a part of your property that’s based on “capital improvements” that increase the property’s value. This includes adding a permanent structural change, or restoration that increases the total property value. Businesses need to check with local tax authorities about real estate taxes on their business property.
Streamline Telecom Services
When your business selects a new telecommunications company, it’s important to choose a phone service and internet service provider (ISP) plan that allows for ample scalability whether it’s up or down. This includes Oregon’s telecom giants like AT&T, Verizon, and T-Mobile. It’s important for your company to receive system updates and the latest technology to make scalability easier. You can lower costs for landline/mobile phones and Internet connection when up-scaling. Cut extra services you don’t need since these “add-on” and “bonus” services might be unnecessary.
Consider Fees When Adding Insurance Coverage
Growing companies can also save money through business, healthcare, and workers comp insurance. According to experts at Cerity, companies can lower costs by eliminating upfront costs and commissions. Workers comp is one of several types of business insurance that protects companies. Oregon law also requires companies with 50+ employees to provide health insurance, while most companies are also required to provide workers compensation insurance. When searching for insurance plans, save money through fewer fees. This includes those related to policies canceling, maintenance, rates, and switches. Reducing such fees can provide big savings even if your company needs extra coverage.
It is a big decision to determine if you should grow your business. Meanwhile, it’s quite feasible to lower your company’s fixed overhead costs including mortgage payments, internet bills, and insurance plans. After all, this can help your profit margin to grow as fast as your business does.
