Every business has overheads. Even the slimmest and streamlined business, working from home and using cheap materials and equipment, will still have outgoings that keep them afloat. And these overheads constitute one of the ways in which you can make your business more efficient by bringing them down to their absolute minimum. In this short guide, you’ll learn what you can do to make your business run more efficiently and with lower overheads, ensuring that your profit margins increase, enhancing your ability to offer competitive prices to your customers.
Rent and Utilities
Your business may well be renting a facility, an office, or a co-working space in which your employees can gather. And in each of these spaces, you’ll be paying fees for electricity, water, heating, and other services like cleaners. Taken together, these fees are likely among your highest costs each month. And so they’re your first target when you’re thinking of reducing your overheads.
As a result of the pandemic, the business rental market has changed dramatically. Demand is down, supply is up, and this should result in cheaper rents. Leverage this fact to reduce your own rental payments. Meanwhile, you can bring down electricity business fees and the cost of other utilities by using smart comparison sites – which can save you up to 45% on what you’re currently paying.
Staff and Insurance
Your biggest outgoing, especially if you’re a larger business, will be staff wages. These aren’t quite overheads – your staff makes you more money than you lose paying them – but there are still ways to optimize your workforce in order to get everyone pulling in the same direction, with no dead weight and no inappropriately large ballooning wages. Keep an eye on this at all times to ensure you’re never overspending on your wage bill.
Meanwhile, you’ll be offering perks to your staff in the form of insurance – and you’ll have insured your business and its possessions, too. Insurance premiums can be high, especially in the wake of a pandemic. But you should negotiate with providers over the phone to bring these costs down where possible.
Equipment and Hardware
Finally, every business needs to provide its workers with a laptop and a phone. These are your most basic, most important items of equipment that you’ll be periodically spending money on. You’ll also be paying for subscriptions to software. All of these things operate on a sliding scale when it comes to price – leaving you to decide whether to invest in cheap equipment and software or spend a little more.
That decision will rest on the quality of the items you’re looking to equip your team with. Do you want them operating with the finest in business computing power, or are you happy to go mid-range? Weigh up the costs and benefits to ensure that you’re not spending too much on your technology – but that you’re not buying cheap and unreliable equipment either.
Business overheads are there to be slashed. This article looks at how you can do that, increasing your profitability by reducing your operating costs.