Top Tips to Reduce Overhead Spending Today
Overhead spending may be costing your business too much money. Taking the time to evaluate where your resources are going is a valuable exercise that could improve your bottom line. Below are some of the most useful ways to reduce indirect costs and increase revenue!
Invest in appropriate software tools
Research multitasking software and digital platforms that can either eliminate or sync with existing software. Popular tech brands may offer a wide range of products and services but consider the size and scope of your business before signing up. You may end up investing in services that are unnecessary for your enterprise. Complex platforms are not necessarily better and they are often more expensive. A start-up that offers exactly what you need and a lower price may be a better option.
Hiring full time staff is a huge expense and is often unnecessary. Your business can save 20-30% on payroll expenses by working with freelancers and consultants. Websites like Upwork offer thousands of high quality professionals who you can bring on board as virtual assistants, web developers, marketers, accountants and even customer service agents. Can’t afford a full time Human Resources manager? Try Gusto, a cloud based payroll, benefits and human resources management tool. Savings on office furnishings, software subscriptions, benefits and vacations can be reallocated elsewhere.
Take advantage of online communication tools
Services such as Slack, Skype, and Zoom enable your teams to communicate with clients and each other in a convenient and affordable manner. Conduct meetings, trainings, tech support, file sharing and webinars quickly and easily. Try Google Voice for telephone services such as call forwarding and voicemail.
Tie employee compensation to cost savings
Discuss spending cuts with your staff! They may have ideas from their interactions with vendors and customers that you may be missing. Incentivize them with bonuses, gift cards, and perks to come up with cost saving measures. Let them be part of the process of increasing your profits! It’s even possible that you are currently offering perks they do not use or want. Spending a fortune on snacks and coffee when most stop by Starbucks on the way in anyway? Paying for magazine and newspaper subscriptions for publications that your staff don’t read? Scale back and reinvest those funds in resources that are more beneficial.
Close, downsize, or relocate your office or retail space
Reconsider maintaining an expensive office space or store front. E-commerce is here to stay so its time to investigate the potential benefits of working remotely and offering goods and services online or relocate to a less expensive area. Municipalities often offer tax benefits for relocating commercial businesses. Look into developing a strong online presence and strategically planning pop up stores through services like The Store Front. Can’t find distribution or unable to open a new retail location in a new city? Test the market with a pop up. Rent flexible work space through companies like We Work or Breather. Remember working from home can enable you to deduct the cost of office supplies, rent, and parking from your taxes.
Clean the clutter
Does your business have closets, rooms and warehouse spaces full of outdated equipment such as printers, computers, phones, fax machines, and office furniture collecting dust and taking up space? Sell or donate these items locally. Don’t forget to request a receipt for tax write offs.
Revisit vendor contracts and credit card agreements
As your business has grown, so has it’s needs. Review contracts and pricing structures for goods and services that were established some time ago. There may be an opportunity to upgrade, downgrade, eliminate service or renegotiate the contract based on current operations. Make sure these expenditures are still valuable and necessary. Reevaluate your credit card terms and shop around for better perks, lower interest rates and annual fees.
Eliminate as much paper as possible. This will save money on printer paper, ink/toner and you might even be able to get rid of some bulky file cabinets! Be sure to back up sensitive data on a hard drive or cloud. Insitu’s e-commerce platforms make the paperless transition very easy with online access to sales data, forms, and digital catalogs.