For every small business, it is essential to have access to an emergency fund. It is useful for whenever an opportunity to grow arises which needs financing, or when the business itself is facing a loss or a reduced inflow of cash. It helps the business grow on a consistent rate, and also provides the support it requires in times of need. That is where a commercial line of credit (LOC) comes i...
Keeping your overheads down is one of the best things you can do for your business. The lower your expenses are, the better your profits will be and the more likely it is that you will be able to weather any storms in the economy now and in the future.
The good news is, whether you’re a small business seemingly existing on a shoestring as it is or you’re a huge multi-national company with a huge budget, there are numerous things you can do to reduce your overheads – here are just some of them:
Review, Review. Review
Review every cent your business spends and think about whether it is really necessary. Do this every few months to ensure that nothing has changed and you are much more likely to identify areas where you could save.
Migrate to the Cloud
Switching to cloud services is a very easy way of cutting your costs because you do not need to have quite as many machines and you can pretty much do away with some, like servers completely. This means that your IT support and maintenance skills will fall too. To ensure that you get the best deals, shop around because there are a lot of cloud service providers around now and some of them are much more expensive than others without offering anything extra.
Ditch the Office
Okay, so if you’re a big business with lots of employees, this is not going to be practical – although you could look at whether you could downsize and still be able to run your business effectively- but if you’re a small operation with just two or three employees and you’re renting an office space, are you wasting money? It’s never been easier to work from home thanks to the latest tech, and a good virtual office provider can help you to take care of the busienss address, professional phone answering and meetings side of things by providing space and services as and when you need then, dramatically slashing your costs. It’s at least worth looking into it to see how practical it could be when you can save hundreds of dollars each month.
Use Internet Phone Services
If you’re still using a traditional busienss phone system, chances are you are wasting money because internet-based services like Skype and Google Voice are just as good and far cheaper.
Did you know that printer ink is more expensive than vintage champagne and often gold? Paper might not be nearly as expensive, but when you’re using a lot of it, it can really add up. So, it makes sense to only print those documents which it is absolutely vital to print. For the most part, you can get away with creating PDF documents to be shared digitally, sending emails and using text-based apps to share information with your employees. Give it a try and you’ll be won over in no time at all.
Switch Merchant Accounts
take payments via a third-party merchant, which most businesses do, it’s worth checking which other services are available because there are now more options than ever, from Paypal to Worldpay and many of them will charge smaller fees than you’re paying now. Even if you can shave a single percent off your merchant fees, that could be a truly significant sum, so it is well worth doing.
If you have a lot of people on the payroll and it just isn’t sustainable, then letting some of them go, although sad, may be what you need to do if you want to reduce your overheads and ensure your business is healthy. The best way to do this and ensure that your business doesn’t suffer as a result is by outsourcing their work. You can outsource everything from bookkeeping to marketing these days using sites like Peopleperhour.com. So, it’s really easy to do. More importantly, it will allow you to make significant savings too.
Instead of traveling to all of those important meetings all over the country and even the world, try teleconferencing instead. The technology is now sufficiently advanced that you are unlikely to face any hitches and you will save so much money on fuel, airline tickets, hotel stays, eating out and probably a whole bunch of other stuff too.
Team Up with Other Businesses
A little-used way of reducing business overheads that can be really effective is teaming up with other businesses in your area so you can benefit from bulk discounts o the kind of things that most businesses need.
If there is any equipment that you need which is not vital for everyday use, but which is important to you on occasion, instead of dropping a lot of money on buying it for your company, do the math and see if renting it when you do need it would be more cost-effective instead. Usually, you will find that it is, and if you’re a small company, it frees up vital resources to invest elsewhere in the business.
Hire Your Resources
On the flip side of that coin, if you have equipment including vehicles that you own, but which you don’t need to use all the time, why not think about hiring it out to third-parties, so that it can help to pay for itself and reduce your overheads in a roundabout kind of way.
Ask for Employee Suggestions
Just because you’re the boss doesn’t always mean that you know what’s best for your busienss, so ask your employees to offer up suggestions on ways they think you could save money, they might just surprise you with a few ingenious ideas that will help you to save a whole load of money over the years.
It’s always a good idea to reevaluate the contracts that you have with everyone from your suppliers to your equipment rental company to see if they still offer you value and to try and get an even better deal. If your business has been a good customer, paying on time and giving those other companies a lot of business over the years, chances are that they will be very amenable to offering you a better deal, especially if you hint that you may go elsewhere if the price isn’t right.
Going green by investing in energy-saving bulbs and other equipment which sucks less energy than average is a very simple way of cutting your utility bills. Sure, you’ll have to invest what could possibly be a significant sum in making the switch, but it will pay off much more quickly than you might think and then you’ll be so much better off.
Online marketing is not only more effective at bringing in new customers in most sectors now, but it is also much more affordable because platforms such as Facebook and Twitter can be used for free if you like, and even if you do want to pay for ads (highly recommended) they are very competitively priced.
Use a Credit Card with Benefits
Credit cards that offer gas or air miles or basically anything that you would otherwise have to pay for in the course fo your busienss, are a great tool to reduce your overheads if you use them to pay for all of your expenses and settle at the end of the month so that you don’t have to pay any interest.
Overheads and businesses go hand in hand, but you should at least be able to reduce yours if you incorporate the above into your business plan.