As a business owner, you’ll probably be all too aware that sometimes, overhead costs can be absolutely crippling if they get out of control. As you need to spend money to make money, overhead costs are a necessary evil. However, as essential as operating costs may be, for startup businesses trying to get ahead in a tough economy or even trying to simply break even, one or two months with just a little bit too much overhead can be the final nail in the coffin for a business. Advertising, rent, utilities and other such expenses are all included in overhead payments, but even though these expenses seem pretty normal for a business, it doesn’t mean that they’re absolutely necessary. Cutting down on your expenses means that you can save money in other areas of the business, and reduced overhead costs often leads to prices being reduced – therefore saving your customers money which keeps them interested, say lean consultants.
Go Paperless
Going paperless is becoming increasingly popular and should, by now be an obvious change for any business to make if they want to save money on their overhead costs. It is a great way to not only save on expenditures but also to reduce clutter and be more organized, and storing all important equipment in the cloud or on external drives, and signing contracts electronically will not only save your business money and physical space, it’s also a great way of helping to contribute to being kind to the environment. If you want your business to become more eco-friendly as well, this is one way in which you can do so.
Evaluate What You Really Need
Look around your business office, and ask yourself of everything that you can see in there, what do you really need? Are you paying overhead costs that aren’t absolutely essential – for example, maybe you pay for a monthly delivery of business cards, but are you actually using them in a day and age where you can reach your customers instantly over Facebook, Instagram and Twitter? Are you paying per month for ‘Premium’ web hosting, and do you really need it? Whether it’s office equipment, supplies, or physical space, you shouldn’t be paying for anything that you don’t actually need.
Find Your Perfect Business Space
The location of your business is crucial, and before you choose a perfect business space it’s essential that you ask a series of questions in order to ensure that you don’t end up paying over the odds for your business rent costs. If you run a store, you will need a place that your customers can visit, however if you run any other kind of business, ask yourself do you need office space, or can you quite easily manage working from home? What about your staff? Do they need a physical area in which to work, or can they also be asked to work from home or telecommute? How often do you need to interact with clients face to face, or can all interaction be done online? The answers to these questions will vary depending on your industry and your company’s size, however, securing a space that is perfectly suited to your business will likely save you time and money in the long run.
Don’t Pay for the Phone
In this day and age, there is really no need to be paying a monthly fee through your nose for a dedicated landline telephone line for your business. If you require a phone so that clients and employees can get in touch with you, you may wish to have a cell phone on pay and go so that you can give that number out as a contact, however you don’t need to actually pay anything to receive calls. When it comes to making calls, in between services such as Skype, Google Voice and even FaceTime, paying for phone calls is rapidly becoming a thing of the past.
Smart Hiring
When you decide to hire new members of staff, it’s a good idea to make smart decisions about hiring and take on staff who are multi skilled. They don’t need to be crazy clever with a degree in math, however, employing someone who will be able to work just as well in different areas of the business is a good idea to keep overheads down, as it saves you taking to two different people instead.
How do you keep your overhead costs low at your business, and how has this affected the prices you charge your customers?
