Six Simple Ways to Cut Down on Your Business’ Overhead Expenses
The first few years of starting a new business are always tough. Money is flowing out instead of in, and going broke is a very real possibility if you don’t take precautions against your overhead expenses going overboard.
Creating a successful business budget includes listing your fixed expenses as well as any one-time costs you can predict. If you see and assess that your fixed or operational costs are way too big to be sustainable, here are simple ways you can cut those down.
- Go paperless
When businesses go paperless, they save money from no longer buying reams of paper. They can also do away with buying printers and ink cartridges, not to mention filing cabinets and hundreds of folders to sort those papers in for years to come.
Everything that can be archived physically can be stored digitally. Seeing as you will undoubtedly need a computer in your office anyway, why not use it to archive documents and keep records instead of printing everything on paper?
- Get energy-efficient equipment
From LED light bulbs to power strips to timer-equipped machines, your choice of equipment will dictate your power consumption level and in effect, your power bills. Energy takes up a huge chunk of any office’s overhead expenses, so make sure you compensate for this inevitable expense by getting energy-efficient equipment. They may be more expensive to purchase, but they will save you more money in the long run.
- Switch energy provider
If, after you’ve replaced all the gadgets and equipment in your workspace, your power bills are still coming in bigger than desired, it might be time to reassess your power supplier. More specifically, it might be time to check how much you’re being charged for your consumption.
Most states and cities have deregulated power markets, allowing you to compare electric suppliers and choose which one gives you the most value for your money. You may have to pay a minimal amount for switching providers, but if the difference between what you’re being charged now and what you’ll be charged when you jump ship is big enough, then the switch will be worth it.
- Minimize subscriptions
Save for security applications and data encryption. Every service you would need as a small business owner can be provided by these free apps for small businesses. There’s no reason for you to drown in subscription charges every month for apps and software that you rarely even use.
Do not fall into the trap of subscribing to an entire service for a one-time task you wouldn’t repeat in the future. For these, you can maximize free trials and basic accounts instead of committing to a monthly payment. According to forbes.com, subscriptions are one of the seven common fees that eat into your company profits.
This is not only true for your digital subscriptions, either. Be honest with yourself when assessing whether your subscription to broadsheets, magazines, and catalogs are adding value to your work culture. If you notice that nobody’s reading them, and all they do is end up in the trash at the end of each week, then it might be time to cancel that subscription once and for all.
- Have some employees work from home
If there’s anything the coronavirus pandemic has taught us, it’s that most jobs can be done from home. If you allow but a few core members of your operations to report for work remotely, you can save a substantial amount of money on utilities, and can even stall physical expansion or having to move to a bigger office as you scale the business up. Just be sure to equip your remote employees with what they need.
- Prioritize social media marketing
Traditional marketing and advertising are good, but social media marketing is the name of the game in this day and age. This bodes well for your budget, too, since marketing online is not nearly as expensive as traditional channels. Sometimes, and if you have the skills, you can even run effective marketing campaigns online– for free.
Money and capital funding are not what makes marketing efforts successful. All you need is a good idea and an even better execution.
With that, be reminded that running a small business is hard, but throwing wads of cash onto your problems cannot solve them. You have to be creative, ingenious, and determined to get through them — without spending too much on operational expenses.