As important as it is to be an effective manager, an effective marketer, and effective salesman, and a visionary, there’s one skill that you simply can’t be successful in business without. We are talking about good, old-fashioned money sense. Without a good grasp of the numbers, it’s all too easy for growing costs to swallow up even the most successful of enterprises. Here, we’re going to look at how overheads can be riskier than you might have thought, and how you can get back in control of them.
Evaluate your costs
First of all, to see whether your business is hurting financially, and which overheads are the culprit, you need to know what your incomings and outgoings actually look like. Accounting software can help you get a much better grasp of where you’re spending money. It can help you quickly identify some key areas in which to focus your cost-saving strategies What’s more, they can help you put together budgets, so you can see exactly what targets your business needs to meet if you want to be profitable with your costs as they currently stand.
Stop your printing problems
One overhead that has become significantly easier to cut down the costs of is printing costs. We’re not just talking about the paper, but also the ink, toner, maintenance costs for frequently used printers, and storage for all your paper documents. Going paperless is becoming easier than ever, with the growth of digital document management tools and backups like Cloud servers that make it safer to keep documents in digital format. You don’t have to go 100% paperless, as most businesses will always have some need for a paper trail. However, you can easily reduce how much you are spending on printers and printing supplies by finding a balance with your digital storage.
Make some room and some money
As mentioned, reducing the amount your business prints on a daily basis can help you save room in the office. You won’t need as many filing cabinets. Saving storage space can help you save money in a big way, too. When it comes to business equipment or materials, you have to spend a certain amount of money on keeping storage cool and dry, for instance, to keep your goods in good condition. What’s more, if you find that you can cut down on the amount of space you use, you could effectively downsize your office and make some major savings. Selling your old office furniture and equipment could show that you don’t really need as much space as you’re currently paying for.
High-energy businesses should have high energy costs
We are so used to a world of business where technology dominates that we might be at risk of thinking that super high energy bills aren’t just the norm, they’re a part of running a business you just have to expect. This can lead us to getting complacent. There are plenty of ways to cut your energy costs down. You can figure out what the cost is from your provider versus others to figure out whether you can get a better deal. You can arrange for an energy audit to see where your business is wasting most energy. You can adopt cost-saving practices like ensuring digital technology isn’t left in standby but is powered off completely or make changes to the office like opting for energy saving lights. There’s plenty of money to be saved in how you power your business.
Re-evaluate your third-party contracts
Besides your utility providers, most businesses have third-party contracts that need to be looked over on a regular basis. You might rely on suppliers, wholesalers, or work with service providers in a variety of ways. Whatever the relationship, don’t ignore the fact that it can be renegotiated. Negotiating your outsourcing relationship, for instance, could see you reducing costs or dropping services that you’re not truly making use of. If negotiations can’t be made, then there is nothing stopping you from looking for alternative providers, as well. When it comes to outsourcing, there comes a time when it’s actually more cost-effective to bring their duties and services in-house, as well. If your demand is great enough, then creating a position could cost you less than running up an exorbitant bill through a third party.
Market wisely
All businesses need some kind of marketing to spur growth, but depending on your current strategy and trajectory, you might be spending more on marketing than you need to. For instance, consider the differences between outbound and inbound marketing. Outbound tactics, like direct mail, advertising, and commercials, are great at generating short-term growth but quickly become expensive. If you want to continue growth at a more manageable rate but to cut down the costs, inbound tactics like search engine optimisation and content marketing are much cheaper. What’s more, with a little effort, you can learn most of the techniques involved yourself, so you don’t necessarily need to pay for it if you have the time to spare.
Be savvy with future hires
As mentioned, sometimes it is wiser to go in-house than to outsource it. In other situations, however, freelancers can be more cost-effective than employees. For one, by being flexible to remote workers, you don’t need to expand your office or provide them with any physical resources. Depending on how much you pay them, freelancers can be less expensive since they aren’t owed any tax or other contributions by their contractor outside of the agreed rate of pay. Freelancers do come with some strings attached, however. For instance, there’s very little stopping them from going to work for another in a matter of days, so you have to ensure that you write effective contracts for them.
Every business has to deal with overheads and trying to cut some of the costs mentioned above entirely can be disastrous for your business. However, you don’t have to let them run rampant. Hopefully, the tips above have shown you how to keep your overheads from getting you in over your head.
