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7 Tips for Reducing Your Overhead Costs

7 Tips for Reducing Your Overhead Costs

    If you are self-employed or own a small business, you know all too well that out-of-control overhead costs can be crippling. Operating costs are a necessary evil– you need to spend money to make money, after all. But for businesses trying to weather tough economic conditions, or for start-ups just trying to break even, one month with too much overhead can be the kiss of death.

    Overhead can include expenses like rent, utilities, office supplies, and advertising. And while all these expenses seem pretty normal, it doesn’t mean they are necessary. If you’re serious about cutting costs without cutting corners, the following tips can help reduce overhead in your business.

    1. Go Paperless

    This should be pretty obvious by now, but going paperless is a great way for a business to decrease both clutter and expenditures. You can store important documents in the cloud or on disks, sign all contracts electronically, and help save the environment as an added bonus.

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    You won’t have to pay for paper or ink cartridges. You can sell your printer on Craigslist. And if you back up all your paper files digitally, you might even be able to downgrade to a smaller (and cheaper) office space, saving even more money each month.

    2. Splurge on an Accountant

    It may seem counterintuitive to shell out big bucks for an accountant or tax service professional to do your bookkeeping. After all, these people generally charge a lot of money for their services. But if you have someone at say, H&R Block look over your taxes this April, the company’s policy is to pay any penalties or interest caused by an error on their part.

    Best of all, tax and accounting professionals will be more likely to find deductions that you might have overlooked. It’s a big investment, especially for a small business. But it’s an investment worth making. You can’t put a price on peace of mind.

    3. Evaluate Your Needs

    Look around your office. Now, ask yourself, “What do I see here that I don’t use every day?”

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    Do you really need business cards in an age where you maintain a web site, a Twitter profile, and a Facebook page? How much are you paying for “premium” web hosting each month?

    You shouldn’t be paying for anything you don’t need, whether it’s office equipment, supplies, or space. Which brings me to my next point…

    4. Find the Perfect Space

    Is your office currently in a location that makes good financial sense? Do you need to maintain a downtown storefront, or would you be better served by working from a smaller office? Do you even need an office/studio space? Could you work from home instead? How often do you need to interact with clients face-to-face?

    The answers to those questions will vary depending on your industry, the size of your company, and your financial outlook for 2011. By securing a space that really suits your business, you will likely save time and be more productive.

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    5. Ditch Your Phone

    There’s no reason you need to pay through the nose for phone service. Not in this day and age.

    Again, how much you can cut back depends on the size of your company, how many employees you have, and what industry you are in. Between Skype and Google Voice, paying for phone calls and voicemail is a thing of the past, though you may still need to pay some money for international calling. Both services also have mobile apps, meaning you can stay connected on the go.

    And if you need a “traditional” land line, consider VOIP over the standard offerings from phone companies in your area.

    6. Make Smart Hiring Decisions

    If you have to hire a new employee, hire someone who has multiple strengths. They don’t need to have a degree in Computer Science, but if your new sales rep also knows how to check your TCP/IP settings and craft press releases, that’s a huge plus. Investing in professional development for your employees is another way to keep them happy and promote long-term growth and success for your company.

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    7. Develop Brand Ambassadors

    Advertising is expensive, and can’t guarantee consistent or impressive results. You might pay a couple hundred dollars to run a TV, radio, or print ad in your area, only to find that you drum up very little business.

    A smarter idea is to get your clients to become brand ambassadors. Offer your current clients and customers incentives for talking you up, and for referring new business to you. Word-of-mouth is still a persuasive tool in our digital age, and one that people tend to take for granted. Get satisfied customers to tweet about you for discounted services, or offer current customers free services for every new client they refer to you.

    The Bottom Line

    It’s almost impossible to run a business without some overhead. But these operating costs can be minimized or eliminated in many cases, leaving you with more profits in your pockets. A business with streamlined operating expenses will have the best possible chance for success, so make sure you’re running a tight ship.

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    Published on June 12, 2018

    How Much Money Do I Need to Retire? Find Your Answer Here

    How Much Money Do I Need to Retire? Find Your Answer Here

    It is never too early nor is it ever too late to start planning for retirement. It ultimately depends on your way of life, where are you living, and whether you need to let go of anything. A successful retirement strategy is to have enough pay to cover your expenses with a little cash going into a savings account for sudden financial needs.

    With regards to retirement, we all have an alternate vision in mind. In fact, some think about traveling throughout the world, while some think of a peaceful life with their grandchildren. Whether we get ready for it or not, we will one day turn to retirement age and so, we should be prepared for it. I’m going to tell you how in this article.

    Benefits of early ventures for retirement

    The way this works is you figure out where you need to live, the amount it will cost you to live there (rent/food/transportation), and the various expenses you will need to account for, like travel/insurance/medical bills and taxes. Many people are struggling to put aside money for their future savings and some haven’t started yet. Think you can put off thinking about retirement? The reality is that you need to start thinking about it right now, and putting aside some money from today.

    There are a lot of benefits of taking early steps towards retirement. Utilize the power of compounding, low investment for targeted corpus and you can create more corpus investing the same money:

    • If someone saves $100 every month and starts investing for 30 years at 10% return, initially you will see that within 5-10 years, your investments will not multiply. However, after that period, the corpus will increase immensely with the impact of compounding. The investment period expands the extent of profits increments in the corpus.
    • Suppose there are two people, one aged 30, and the other 40. Both need to resign at 60 with the same retirement objectives of $300,000 USD each. Both will put resources into an investment with 10% of the return. Thus, to accomplish their retirement objective, the younger one needs to save $100 USD / month and the older one needs to collect $300 USD / month. Since the older one has started investing ten years later than the younger one, he will pay more than double what the younger one will pay.
    • If someone saves $100 USD every month and starts investing at 30 years old till 60 and gets 10% annual return, his corpus becomes around $170,000. Otherwise, if he starts the same amount spending at 40 years of age with the same 10% return, he will have around $57,000 USD. He can profit by just investing ten years early.

    You can’t invest too much money in retirement during the early stage of your career since you may have different objectives. However, you can increase the investment gradually if you start investing just a small amount.

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    Average retirement age

    For many people who are nearing retirement age or recently resigned, one of their most significant financial regrets is that they did not focus on saving for their golden years. As per the Consumer Reports study, it demonstrates that only 28% of investors with the age of 55 years or older are pleased with the way they have saved for retirement.

    As per the report, The Economic Policy Institute breaks down how much Americans have put away.[1] Since you know that when the majority of people retire, you can subtract your age from that more significant number and check down what number of more years you need to work.

    But many retirees go back to work. Some of them do part time job while others do seek for a second career. Some even come back to full-time work and then retire again in a couple of years. So deciding their retirement age could be tricky.

    Average retirement savings

    To get retirement started, saving is pretty easy, though it can seem complicated. These simple five steps will make you go on retirement now. So, you don’t need to stress over having the same regrets as today’s retirees.

    1. Invest 15% for your retirement

    Your initial step is to save 15% of your income. This will depend on your gross income and does not include any coordinating assets you get through your employer’s retirement plan.

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    It’s sufficient to enable you to achieve your retirement investment funds objectives, but not too much to keep you from enjoying your income today.

    2. Utilize tax-advantaged retirement plan

    Yes, we utilized the T-word; however, don’t daydream! Split your 15% retirement contributing budget between charge conceded retirement plans like your 401(k) or after-tax plans like a Roth IRA.

    3. Invest your money around

    To put it all in one place is the most significant risk that you can take with your retirement money. With mutual funds, however, you can invest in the biggest and most recognizable brands as well as that new organizations you’ve never known about but has a lot of growth potential.

    Opt a growth-stock mutual fund with background marked by solid returns for both your 401(k) and Roth IRA speculations.

    4. Stay with it

    Since mutual fund investing is less risky than investing in single stocks, it is not risk-free. You can see your savings grow in the long term as long as you can leave your money where it is and keep adding to it.

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    5. Work with an investing professional

    It is essential to look for an investment professional, as you must have a lot of queries concerning your retirement plan during 30 or more years of investing,

    Never make due with an investment professional who recommends or patronizes you to turn over all your investment choices to them. Since this is your retirement, nobody will think or care about it more than you do!

    You might analyze or compare your savings against the average retirement savings for your age group to check whether you’re falling behind or getting towards of the curve. On the other hand, it might be conceivable to hang up the work boots and hit the shoreline with fewer savings if you live easily or below your means.

    How to achieve your financial goals?

    An ideal approach to achieve your financial goals is to stay focused on what you need for your future, ignore everything (and everyone) else that may divert you. There’s a significant business culture out there that requires you to stay in debt, live for the occasion and stress over your future later on.

    You need to start planning for your future from now, not when you have more time or money to invest. You can even talk to a financial advisor for any help. Cooperate to set your money goals and make an action plan to reach them. You can retire younger than you thought you could if you create a project and follow up on it.

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    Start planning for your retirement

    A lot has changed in the last 30 years; our previous generation had an career goal and they would join either a large private company or a government organization immediately after school or college. Then they would spend the next 38 years in the same organization and the form of provident fund and gratuity. They would retire with a decent corpus and they would later spend the remaining time with their pension benefits. It’s a bit different now, but with the above information, you’ll be well prepared.

    Whether you can afford to retire now or not, you need not bother with a retirement calculator to get a rough estimate. You should have the capacity to closely approximate your daily spending habits to figure out how much money goes out the door every year.

    Featured photo credit: Pexels via pexels.com

    Reference

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