Unchecked overhead can quickly add up and undermine the sales you’ve worked hard to make – especially in today’s economy. Take time to evaluate your business costs, particularly in these five areas, to determine how you can reduce them.
1. Save on Energy and Utility Costs for Your Small Business
- You want to keep your office comfortable, but you shouldn’t need to run the HVAC system constantly. Brian Martucci of Money Crashers offers multiple suggestions for decreasing climate control expenses. He recommends investing in a programmable or smart thermostat that will automatically adjust the target temperature based on the time.
“At a 9-to-5 office, that probably means increasing the heat or AC in the morning and dialing it back (or turning it off completely) in the evening and overnight.”
- If you have fewer workers in your office right now, or it’s just you, you can likely dial back on utility expenses.
2. Save on Staffing Costs for Your Small Business
- Full-time employees cost you a lot of money, and depending on the work they do, they might not earn you that much in return.
- Martucci recommends using freelance or temporarily contracted workers for tasks that could be easily outsourced. Also consider making some roles part-time to reduce salary and benefit expenses, or explore the possibility of creating a seasonal intern position.
- Susan Ward of The Balance Small Business suggests having family members fill roles in your company when possible — especially young ones who could use work experience. Also, talk with your employees about taking unpaid time off if they’re financially stable.
3. Save on Building Costs for Your Small Business
- When you calculate your monthly business expenses, you’ll probably see the rent or mortgage payment as one of the biggest numbers. And if you have fewer employees working in the office these days, you might be able to downsize your office space.
- Peter Daisyme of Due.com recommends reevaluating your current facility to see if it’s worth the cost. Do you need all the space you have? If you aren’t utilizing some of the building, you could either sublease that space to recoup some of the cost or move to a smaller building.
- Think outside the building too: Do you need all that yardage and parking spaces? Do you need to stay at this current location, or could you move to one in a less-populated area with less expensive rent or property costs?
4. Save on Supply Costs for Your Small Business
Do you need to have all the materials you’re currently paying for, or are you paying for excess stock you’re using inefficiently?
In an article for American Express, business consultant Royale Scuderi strongly recommends looking for ways to cut material costs and optimize your resources.
Are you ordering more materials than you require? Consider purchasing supplies on an as-needed basis instead of preemptively.
What are you doing with your old or excess materials? For instance, Scuderi says, “Try selling leftover cardboard, paper and metal instead of sending it to the recycling center. Also, consider ways to use your waste to create another product.”
You can also probably make a couple of bucks on old electronics and equipment when you replace them with newer models.
5. Get Help Reducing Overhead Costs for Your Business
- These are just a handful of the many possible ways you can reduce your business expenses. Take the time to perform a full audit of your costs, and talk with your staff and financial advisor to brainstorm ways to reduce overhead.
At Minster Bank, we know small business banking — and helping your small business grow. We’re only a phone call, email or visit away. Learn more about our business services to see how we can work together to help your small business thrive.
Published by Minster Bank
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