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5 Great Tips for Reducing Small Business Overheads

5 Great Tips for Reducing Small Business Overheads

In a small business setting, overhead costs are simply expenses a business has to incur to make money. These costs include, but aren’t limited to: cost of supplies, wages, rent, telephone bills, travel expenses, insurance costs, etc. To ensure your small business doesn’t fail because of capital/cash flow constraints, as is the case with most small businesses, you have to watch your overhead costs.

Although most overhead costs are essential for the survival of any business, it’s possible to reduce them without cutting corners so that they don’t get out of hand and you don’t compromise business operations. Let’s get right into it and discuss some of the best tips for reducing overhead costs for small businesses.

1. Find cheaper but better office space.

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Office

    The cost of renting business premises is usually high. In fact, it accounts for a huge chunk of the overall business expenditure, so it’s a good place to start when you want to reduce overhead costs. In most cases, it’s possible to find a better and cheaper office. You can consider a smaller office if your current office has more space than you need. It’s also worth noting that office design, as well as furniture placement, can do wonders for small spaces. As a result, it’s always possible to work in an office that is smaller than your current one.

    Furthermore, you can consider allowing some of your staff to work from home. Of course, this applies to staff who don’t have to be physically present in the office to get work done i.e. data entry staff. There are other options such as virtual office services. Such options allow you to have all the benefits of having an office in a prestigious location minus the high costs associated with running such offices. As you can see, there are many ways of finding cheaper but better office space. You don’t have to compromise anything.

    2. Outsource work.

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    Outsource

      Salaries are also notable expenses for any business including small ones. One of the best ways of reducing staff overheads is to outsource work. For instance, instead of hiring support staff to answer calls, you can outsource such work to specialized companies. There are very many outsourcing firms available today that handle all kinds of office duties/tasks at a fraction of the cost. You just need to choose an outsourcing firm that suits you best. You can even find freelancers online using websites like Freelancer and Upwork. It’s cheaper and better than recruiting and training permanent staff when you are working with a tight budget.

      3. Use SIP trunks and VOIP technology for communication instead of a telephone line.

      SIP and VOIP

        This is by far the best tip to consider when you want to reduce your telecommunication costs. SIP trunk technology is way cheaper than using telephone lines and offers other benefits like an instant return on investment, scalability, reduced call cost, unmatched efficiency/reliability (never miss calls), increased productivity (improve staff collaboration) and much more.

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        4. Travel when you have to and travel cost-effectively.

        Conference

          As a small business owner, you will be required to travel a lot prospecting and networking. It is, however, possible to cut down on your traveling costs without compromising the growth of your business. Instead of visiting your customers in person every time you want to conduct business, you can choose options such as teleconferencing, video chats, etc. Such options are very cost effective for conducting business with people you have met before. You should restrict travel to important meetings only i.e. annual business renewals or when you are meeting clients for the first time. When you have to travel, you should book trips in advance and choose cheaper options i.e. travel economy instead of business class.

          5. Join a business cluster and take advantage of bulk ordering.

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          Business Cluster

            This is another great tip when you want to reduce the cost of getting supplies for your business. In most cases, small businesses don’t have money to buy things in bulk. You can still take advantage of bulk ordering discounts by teaming up with other businesses like yours and ordering supplies as a cluster. This way, you don’t have to spend more than you have to, but you still get huge discounts.

            Summary

            These are some of my best tips to consider when you want to reduce overhead costs for your small business without compromising business operations. Since overhead costs are usually inevitable for the success of any business, it’s important to consider ways of reducing them without affecting business negatively. The above tips are bound to help you do just that. In fact, your business stands to prosper when you implement them.

            Featured photo credit: Conference table with chairs. View from above. via kaboompics.com

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            Bruce Cahill

            Founder of BankJobbing.com

            Photographer Working on Concept 7 Hacks to Becoming a Photography Expert 5 Great Tips for Reducing Small Business Overheads

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            Last Updated on April 28, 2020

            9 Millionaire Success Habits That Will Inspire Your Life

            9 Millionaire Success Habits That Will Inspire Your Life

            As technology evolves and information becomes more accessible, it has also become more challenging to define success. A lot of people are trapped in the rat race while trying to discover the actual formula for success.

            You could become overwhelmed with what tools, techniques or philosophies to imbibe while trying to get tips over the internet. At every click and turn, there are ‘how-tos and quick-fix’ on how to become successful overnight. You will find several courses, articles, videos and books on how to achieve financial success.

            But what if I tell you it doesn’t have to be complicated as people made it out to be? What if you could achieve success by merely following these 9 millionaire success habits?

            1. Read for Personal Development

            A daily habit I have discovered millionaires share in common is reading. For instance, if you are an entrepreneur, you need to read to become an efficient leader and a productive business owner. Reading helps you to grow and learn without going to a business school.

            A research conducted by Thomas Crowley indicates about 85% of self-made millionaires read at least two or more books each month. [1] Warren Buffett is one of these examples. He spends 80% of his day reading. In the early days of his investment career, he would read 600 to 1000 pages in a single day.

            While millionaires sometimes read for pleasure, they also learn to improve themselves. They read topics on leadership, how-tos, self-help, biographies, lifehacks and also follow current events.

            Here’re some recommendations for you: 25 Best Self Improvement Books to Read No Matter How Old You Are

            2. Establish Multiple Sources of Income

            Another success habit I noticed about successful people is that they don’t depend on a single income source. Every millionaire possesses multiple sources of income. This helps them to manage economic challenges and also make more money.

            They are passive income addicts. They earn interests from loans, rental income from real estate, royalties from intellectual properties, dividends from investments. They also launch a side business or run a website or sell information products.

            How income is made either passively or actively is what separates the successful from the wannabes. They are always learning ways to build multiple streams of income.

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            3. Live on a Stipulated Monthly Budget

            An average millionaire does not believe in luck and jackpot. They take the time to understand cash flow-income and expenses. Based on this, they establish a monthly budget and religiously stick to it.

            The essence of the budget is to minimize unnecessary expenses. This will help you gain complete control of your financial life. Budgeting helps you to avoid overspending to achieve your financial goals. Here’re some tips to help you stuck to your budget: 32 Hacks for Sticking to Your Budget

            4. Manage and Maximize Money

            The most significant education for a millionaire is financial intelligence. Nobody attains financial freedom without gaining financial intelligence. This is the more reason millionaire, regardless of their income, keep their knowledge about tax strategies updated.

            They always seek to reduce their tax bills. One approach they employ is by living or incorporating their business in states with no income tax.

            Do you know that about 60 companies paid $0 legally in the 2018 tax year? Some of these companies that ‘avoided'(note: not evaded) federal income tax include Chevron, Amazon, Halliburton, General Motors, Delta. Their US income was totaled at $79 billion with an effective tax rate of -5%.

            What’s the deal? They got a tax refund.

            How do they accomplish these?

            An ITEP report indicated that they have the culture of throwing huge sums at tax experts who assist them in discovering creative, as well as convoluted means of paying little tax as much as possible.[2]

            5. Avoid Debt

            Another habit that separates the millionaires from the rest of the world is how they manage debt.

            They don’t live an extravagant lifestyle; instead, they only buy what they need and can pay for. They do not book hotels and flights by using their credit cards to pay for them.

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            They are conscious of the interest rates even when they use credits cards or take loans. If possible, they try to pay with cash because of its zero percent interest rate.

            6. Set Daily Goals

            It does not matter if they are setting up a business, a career, or financial projections; they have the success habit of setting short term goals. They plan daily and weekly goals to generate momentum in achieving their long-term goals.

            Ensure you prioritize when setting daily goals. This will help you to achieve the most important to-dos on your list.

            Setting priorities will help you to focus on highly rewarding activities. If you desire financial freedom, it is wise to pursue activities that earn you thousands of dollars rather than hundreds of dollars.

            7. Don’t Act Rich

            The goal is not to act rich but to be productive. Interestingly, Thomas Stanley buttressed in his book that for the most prestige brands of cars, about 86% percent are toys of the non-millionaires. While most believe that people with huge fortunes tend to drive exotic cars, in reality the largest consumers of pricey cars are aspiring millionaires.[3]

            According to findings by Experian Automotive Researchers, 61% of individuals who earn $250,000 or more rarely buy luxury brands. Instead, they buy Hondas, Toyotas, and Fords like the rest of the world. The reason is they are not ready to spend money on premium cars that tend to drop in value in a couple of years as it would cost money. Millionaires invest in assets that appreciate.[4]

            8. Own or Buy Businesses

            In Robert Kiyosaki’s cashflow quadrant, he divided how you earn income into four quadrants. The E and the S quadrants take the left position while the B and the I are on the right side. According to Robert, it is possible to be on all quadrants, but the millionaires are not.[5]

            • E stands for employee – they work for others
            • S stands for self-employed – they work for themselves
            • B stands for a Business owner- employees work for them (500 or more employees)
            • I stand for Investors – Money work for them like Warren Buffet.

            Your goal is to move from the left quadrant to the right quadrants where you own big businesses or make money work for you.

            It is possible to become financially successful by pursuing what you love. For instance, if you love writing, aspire to be the best seller. Wealth and passion work together.

            Check out How to Start a Small Business with Little to No Money for tips.

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            9. Avoid Get-Rich-Quick Scheme

            A millionaire holds patience as an essential virtue. It takes patience to become successful, not only in finance but in every aspect of life. While it is possible to become financially successful at an early age, most millionaires hit it at age 50. They live a moderate life, invest in their future and retire rich.

            Bonus: How to Develop the Millionaire Success Habits?

            Having learned these habits, the next question is,

            How can I develop the Millionaire Success habits?

            Here are six values you will need to develop:

            Establish Your Life Vision

            You need to be clear about what you want in life to set yourself for a life of success. Your vision has to go beyond becoming a millionaire to understanding why you want to become one. Any great entrepreneur you will ever find has a clear vision and an established mission.

            Understanding why you are doing what you do will drive you to become the kind of successful person you want to be.

            Make Your Passion a Profession

            When your passion becomes your profession, work becomes pleasurable. Loving what you do enables money to flow to you and through you.

            So what’s going to be? Wake up every morning by speaking positive words into your work, love what you do, and focus on the work that brings you joy.

            Take a look at this article and learn how to make it happen: 5 Steps To Turn Your Passion Into A Career

            Focus on Solution

            Focusing on the solution means establishing the problem that you or your business address. This will help you focus on the solutions when others are faced with challenges.

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            A millionaire has a mindset that is fixed on the solution. He or she knows there’s a way out, and that every problem is an opportunity in disguise.

            Improve your problem solving skills with these tips: 6 Effective Ways to Enhance Your Problem Solving Skills

            Develop Your Leadership Skills

            Leadership skills are an asset that is indispensable if you want to develop a millionaire success habit. The more you hone your leadership skills, the more you will attract leaders who share your values.

            Be Growth-Focused

            Millionaire entrepreneurs prioritize self-improvement. Here’s how to achieve it:

            • Get a coach. Coaching will impact your life, and you will achieve peak performance in life and business when you have a life coach.
            • Be coachable. It is not enough to have a coach; you must be coachable. Sometimes, you need feedback and counsel to reposition your life and business. A coach has the wisdom and experience to counsel you from a higher perspective. The more you receive feedback and work on yourself, the more you become better at what you do and who you are.

            Flip Your Thought Pattern From Acting To Being

            It is not enough to have a millionaire success habit, you must also become a person of positive influence. This is how you can become significant. Bill Gates is not only rich; he is changing lives in Africa and different parts of the world.

            If you want to become successful, you must first be and think like a successful person. This is how resources you need can flow into your life.

            Here’s a final thought from me:

            It is not enough to do something to have something; success is about being someone who possesses what is needed to take positive and inspired actions.

            More Success Habits

            Featured photo credit: Austin Distel via unsplash.com

            Reference

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