Apart from the supplies and labour required for the core functions of a business, several overhead costs add up to a substantial amount. While you cannot cut costs when it comes to producing high-quality products or services, it’s possible to control overhead expenses.
It’s imperative for a business to minimise its day to day expenditure. Reducing overhead cost will maximise profitability and cut down losses during slowdowns.
Are you trying to run a cost-efficient operation? In this post, we’re sharing our top tips for eliminating unnecessary expenses. Let’s take a look.
1. Rent a coworking space
Are you renting private office premises for your business? In addition to monthly rent, you’d be required to hire a receptionist, security guards, housekeeping staff and so on to maintain the space.
Instead of spending an exorbitant amount on a private space, consider renting a coworking office. This is an excellent option, especially if you’re just starting out.
2. Switch to cheaper utility plans
If you’re receiving an unreasonably high electricity bill, it’s time to look for a new provider. You should compare gas and electric providers to find a better energy plan for your business.
The same goes for the Internet and other utilities. Be on the lookout for discounted plans. As it’s said, every penny saved is a penny earned.
3. Go paperless
In the era of digitalisation, it’s useless to use paper for administrative tasks. Filing, organising and managing paper documents is time and labour intensive.
It’s much more economical to scan all documents and maintain a digital record. Not only will you save precious office space, but you’ll also enjoy quick and easy access.
4. Purchase second-hand equipment
From printers to desktops, brand new office equipment can be quite pricey. You can significantly cut-down this cost by purchasing second-hand equipment. To further bring down costs, consider renting equipment.
5. Hire efficient employees
Instead of hiring employees with a single specialisation, look for multi-talented individuals for your organisation. Such employees can wear many hats, if required and thereby doing away with the need to hire more workers.
6. Outsource non-core functions
Is it economically feasible to set up an in-house IT team? Probably not. When it comes business functions out of your skillset, it’s best to outsource. This will save your time and effort, which you can instead focus on core operations.
7. Focus on energy efficiency
Being careless with energy consumption can hike your energy bills. Make conscious energy consumption a part of your company culture. All employees and staff should practice turning off lights and equipment when not in use. Also, switch to LED lights and energy-efficient devices.
8. Work from home policy
Many modern organisations offer employees the option of working from home. This reduces the cost of renting office space and other support services. Often such employees can be hired for a lower salary.
As for the employees, they get to work from the comfort of their homes and save time and money they would’ve spent on commuting.
9. Smart communication
In today’s world, there are several free communications tools available thanks to the Internet. Apart from being free of cost, these are much more diverse and quicker than traditional forms of communications. Skype and Trello are two great examples of free communication tools.
10. Eliminate unused supplies
Take a look around your office to identify any inessential equipment. From energy-wasting decor fixtures or underused coffee machines, eliminate items that are needlessly costing your business money.
The Bottom Line
Overhead expenses, which have nothing to do with your core functions, can be reduced without impacting overall efficiency. Hopefully, our tips tip your financial statements in your favour. Let us know below if you found this useful?
