Quick Ways to Reduce Overheads
In business, you have to spend money to make money – there’s no escaping it. However, these overheads can become a huge burden so it’s always good to look at ways to cut them, even if just a little bit.
If you’re finding your overheads growing, or you need to tighten your belt, here’s some ideas for cutbacks.
Look at everything
Ask your accountant to give you your most up-to-date list of outgoings.
Are there any that can be reduced slightly by paying annually instead of monthly? Do any of your suppliers reduce bills slightly if you pay by direct debit?
Look for items that you know you can get cheaper elsewhere, or that you no longer need. Take stock of your payments before you make any big changes.
Don’t look for one big saving
There’s no one big saving – it’s more likely that you’ll shave a few pounds off utilities here and there, or discontinue an order or subscription that you’ve forgotten about. These all add up, though.
Talk to employees
Your staff will have some good ideas about making savings. They may see where wastage is happening, or they may have heard about a cheaper supplier than your current one. Use the power of the hive mind.
Look at third-party contracts
If you’re paying retainer fees, or renting equipment, do you still need to do this? Could you buy some machinery outright, or are there cheaper options available? Can a supplier offer you equipment or services that you used to have to go elsewhere for? This could mean a bundle discount if you migrate to them.
Look at your supplies
Can you buy stock in bulk, or online? Can you re-use some resources? There are some overheads that you can’t do without – ink and paper, for example. See if you can get your HP ink online, or if you can encourage careful use of paper.
Look at your staff
This bit hurts, but you may have a few employees who are either underperforming, or whose roles are becoming less relevant. However, they may be glad to go, and your remaining staff may be glad that the slackers have gone. Do talk to an employment lawyer before making any redundancies, though.
Ask your existing clients to do a bit of promotion for you
Word-of-mouth is the most effective advertising, but it’s also the hardest type to make happen. You could make it happen by asking a few long-term, happy clients to become brand ambassadors.
You could offer them discounts, or special items, if they refer people to you. You could also ask for testimonials and use them in your advertising or on your website. Aim for Facebook or Twitter, ideally.
Give one person the role of purchaser – he or she can spend one day a month looking for cheaper telecoms, or cheaper coffee pods. This person should be confident enough to ask for discounts for early payment – you’d be surprised how many suppliers are so pleased to be paid early that they’ll knock off five per cent!