7 Practical Tips to Trim Your Overhead Expenses
Every small business owner knows how challenging it is to cut down expenses without somehow compromising internal or external quality. Regardless of the nature of your business, the first step to reducing your overhead costs is to take the time to go through every single expense you have. Next, assess which ones are necessary for your business to operate smoothly, what can be trimmed down, and what can be eliminated completely.
In this article, we will give you some smart and practical tips that you might not have considered to lessen your costs while maintaining employee and customer satisfaction.
1. Shift to Remote Work Setup
The COVID-19 crisis led to the widespread adoption of remote work setup– and it actually works. Depending on your type of business, you might want to consider making a permanent shift to telecommuting for certain roles to reduce costs. If you still need to maintain a physical office, you might move to a smaller office space to account for the smaller number of in-office staff.
2. Negotiate With Suppliers
Don’t hesitate to contact your suppliers and vendors to request for flexible monthly payment plans or discounts especially with the current tough economic climate. They are often willing to help out small- and medium-sized business clients and cut them a break.
3. Review Your Software Subscriptions
It is no secret that cloud-based apps and tools can help you manage your business with ease. Although a few dollars a month might seem affordable at first, the costs can quickly add up once you set up your subscription for multiple apps.
If you want to reduce your overhead costs, audit your recurring software subscriptions and cancel those which you rarely use. You might also want to downgrade your plan or opt for the free version of these tools. Furthermore, you can search the internet for cheaper or free alternatives that offer the same functionality.
4. Take Advantage of The Gig Economy
Hiring qualified freelancers and independent contractors can be less expensive than hiring full-time employees. You won’t have to pay for benefits and they most likely have their own equipment. When choosing freelancers, make sure that they have a portfolio of previous relevant work that you can review, as well as client testimonials.
5. Automate Administrative Tasks
Some administrative duties such as invoicing, appointment scheduling, and customer follow-up can be automated instead of hiring an administrative assistant. You can also invest in an automated live chat system to assist multiple customers at the same time.
Maintain a Paperless Office
If you are still relying on physical printing, going all-digital and paperless will remove printing-related costs and keep your documents better organised. Aside from being cost-effective, a digital workplace is also environmentally friendly and means data is easily accessible.
6. Revisit Your Marketing Strategy
In order to grow your business, you must be willing to set some budget for marketing, even if you are trying to cut down on expenses. However, before you continue with your marketing strategy, it is important to evaluate each channel and its return on investment.
Get a clear idea of how much you are spending and gaining from each marketing channel. Test and measure different channels, and re-allocate your budget accordingly if you find one that isn’t working.
7. Get a financial advisor
Regardless of how confident you are with your new budgeting, it pays to have a fresh set of eyes to look into it. An experienced accountant can provide you with an objective analysis of your budget allocations and help you save even more on your expenses.
Get in touch with us today and let us help you spend your funds wisely.