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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

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            Last Updated on January 21, 2020

            How to Develop a Millionaire Mindset in 6 Simple Steps

            How to Develop a Millionaire Mindset in 6 Simple Steps

            We all like to dream about being financially wealthy. For most people though, it remains a dream and nothing more. Why is that?

            It’s because most people don’t set their mind to achieving that goal. They might not be happy in their current situation but they’re comfortable – and comfort is one of the biggest enemies of growth.

            How do you go about developing that millionaire mindset? By following these simple steps:

            1. Focus On What You Want – And Take It!

            So many people are too timid to admit they want something and go for it. When there is something that you want to accomplish don’t think “I could never actually do that”, think “I could do that and I WILL do that”.

            Millionaires play to win, not to avoid defeat.

            This doesn’t mean to have to become a selfish jerk. What it means is becoming more assertive and honest with yourself. You don’t have to grab off other people. There is a big pot of unclaimed gold in the middle of the table — why shouldn’t you be the one to claim it? You deserve it!

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            2. Become Goal-Orientated

            It’s almost impossible to achieve anything if you don’t set firm goals. Only lottery winners become millionaires overnight. By setting yourself attainable goals, you will get there eventually. Don’t try to get rich quickly — get rich slowly.

            Let’s take the idea of making your first million dollars and expand on what kind of goals you might set to get there. Let’s also say you’re starting at a break-even position – you’re making enough to get by with a few luxuries, but nothing more.

            Your goal for the first year can be having $10,000 in the bank within a year. It won’t be easy but it is doable. Next, you need to figure out the steps you need to take to achieve that goal.

            Always look at ways to make growth before cutbacks. With that in mind, you might want to see if you can negotiate a pay rise with your boss, or if there’s another job out there that will pay better. You might be comfortable in your old job but remember, comfort stunts growth.

            You may also have other skills outside of your workplace that you can monetize to boost your bank balance. Maybe you can design websites for people, at a fee of course, or make alterations to clothes.

            If this is still not enough to make the money you need to save $10,000 in a year, then it’s time to look at cutbacks. Do you have a bunch of old junk that someone else might love? Sell it! Do you really need to spend $10 on your lunch everyday when you could make your own for a fraction of the cost?

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            If you are to become a millionaire, you need to start accumulating money.

            Here’re some tips to help you: How to Become Goal Oriented and Achieve More in Life

            3. Don’t Spend Your Money – Invest It

            The reason you need to accumulate money is for step three. Millionaires tend to be frugal people, and that’s because they know the true value of money is in investing. Being your own boss goes hand-in-hand with becoming a millionaire. You’ll want to quit your regular job at some point.

            Stop working for your money and make your money work for you.

            Rather than buying yourself a new iPad, that $500 could be used to invest in the stock market. Find the right shares (more on that later), and that money could easily double within a year.

            There’s not just the stock market — there’s also property, and your own education.

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            4. Never Stop Learning

            The best thing you can invest in is yourself.

            Once most people leave the education system, they think their learning days are over. Well theirs might be, but yours shouldn’t be. Successful people continually learn and adapt.

            Billionaire Warren Buffet estimates that he read at least 100 books on investing before he turned twenty. Most people never read another book after they’ve left school. Who would you rather be?

            Learn everything you can about how economics works, how the stocks markets work, how they trend.

            Learn new skills. If you have an interest in it, learn everything you can about it. You’d be surprised at how often, seemingly useless skills, can become extremely useful in the right situation.

            Start developing the habit of learning continuously: How to Create a Habit of Continuous Learning for a Better You

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            5. Think Big

            While I advise to start off with small goals, you absolutely should have a big goal in mind. If you have a business idea, then that is your ultimate goal – to start that business and make a success of it. If you want to invest your way to millions of dollars and do little work other than research, then that is your big goal.

            There is no shame in not achieving a big goal. If you run a business and aim to make $1 million profit in a year and “only” make $200,000, then you’re still significantly ahead of most people.

            Aim for the stars, if you fail you’ll still be over the moon.

            6. Enjoy the Attention

            To be successful, you have to be willing to promote yourself and enjoy the attention to a certain extent. Now the attention doesn’t need to be on yourself, it could be on your brand, but attention definitely attracts money.

            Never be embarrassed to get your name out there. That means finding a spotlight and being brave enough to step right up underneath it.

            If you run a business, try contacting the local papers. You’d be surprised at how amenable they often are to running a story about you and your business, and it’s all free publicity.

            Above all, remember: You control your own destiny. Push hard enough for anything and you’ll get it.

            More About Thinking Smart

            Featured photo credit: Austin Distel via unsplash.com

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