5 Tips to Reduce Overhead Costs for a Small Business

5 Tips to Reduce Overhead Costs for a Small Business
Business overhead costs are expenses that are related to the day-to-day running of a business. Reducing overhead costs is important in a business especially downturns. Overhead expenses are independent of revenue and must be paid whether the business is in a profit or loss position. Overhead costs do not include expenses arising from the production of goods or services.
Here are some helpful tips that most businesses can implement to cut administrative overhead costs without feeling like corners are being cut or belts uncomfortably tightened.
1. Make a List of Expenses, and Audit it Carefully
2. Keep an Eye on Utilities
It’s true at home and it’s true at work: utilities add up. Make sure your electricity and water bills don’t get out of hand. While the Internet is an undeniable necessity for businesses in the 21st Century, you might want to consider cutting your landline service in favour of a Zoom, Team, Google Voice, WhatsApp or even an inexpensive cell line.
3. Cut Down on Travel Costs
If you have a company car, ask yourself if it’s really necessary. If you’re a contractor, it probably is. If you’re a legal office, maybe not. Even if you do decide that the company car is necessary, ask yourself whether or not you could downgrade to something more practical and less expensive in terms of fuel and maintenance.
4. Outsource What You Can
Possibly the biggest single burden on any small business is payroll. Human resources professionals can demand a high salary; therefore many companies are outsourcing their HR to save money. Keeping an accountant on retainer is cheaper than having one on staff, and data entry can be done anywhere in the world. Information technology and cyber security is becoming increasingly necessary for small businesses, making outsourced managed IT services an appealing alternative to in in-house team. The list could go on.
5. Automate What You Can
Automation is even bettering than outsourcing. These days there are scores of cloud solutions, software packages, and software as a service (SaaS) options for business owners in any field. Any good business automation software will reduce payroll, streamline efficiency, and reduce errors.