With the tough economic conditions that start-ups and small businesses face, it is more important than ever to keep your overhead costs down. Your overhead costs generally include expenses like utilities, rent, marketing, and supplies for your office. Despite the fact that these expenditures seem standard, they are not always a necessity. If you need to cut costs and save money, use the following tips to reduce your company’s overhead.
1. Make Your Credit Cards Work For You
Most business owners have at least one credit that they use for business related expenses. Evaluate the cards that you use to see if you are getting the most out of it in the terms of rewards, cash back, or travel miles.
You can benefit by redeeming your rewards for business travel. Points can be exchanged for lodging, airfare, and gas vouchers, and this can reduce your travel / vacation costs significantly. Also, make sure the cards you use are meant for business owners, and not everyday shoppers. Credit card companies treat each division differently, and you could even pay less in interest and annuals fees if you switch to a business account.
2. Hire Smarter
When it comes to bringing on a new staff member, look for someone who has experience in multiple fields. If your new administrative assistant is a wiz at social media, she can potentially save you thousands in fees that would be paid to a marketing firm by handling your Facebook and Twitter accounts.
Hiring freelance workers to handle projects as needed can also save money, since you will not have to pay for training and benefits, but you will still profit from their specialized industry experience.
3. Take an Inventory of Your Needs
By taking some time to look around your office, you can start looking for areas where you can save money. Ask yourself what you really need and also what you rarely use. You would be surprised at the amount of money that is spent on items that are not helping you gain customers or enhance productivity.
You should not be paying for things that you do not need. Whether it is daily office cleaning, business publications that go unread, or even expensive web hosting packages, you can reduce overhead by cutting out the expenses that are not doing anything to increase your bottom line.
4. Take Advantage of Word of Mouth
In today’s technology focuses world, word of mouth is the most influential tool that small businesses can take advantage of. Consider starting a Brand Ambassador program for your clients, where you can offer incentives for having them share their positive experiences.
You can spend hundreds on traditional advertising and not gain one customer, but by simply offering discounted or free services or products for a testimonial that you can proudly display on your website, you can develop a rapport with potential clients before you even meet in person. You would be surprised how many of your customers will be more than happy to film a 30 second video talking about how amazing your service or products are, in exchange for a discount they can take advantage of in the future.
5. Benefit from Telecommuting
Telecommuting can be a way to cut costs, if your business is able to embrace a virtual office space. Your employees have families and other responsibilities, and being able to offer a way to work from home will encourage them to be more proficient in what they do, while you will be able to reap the rewards of saving on reoccurring operating costs, as well as expenses that go along with extra office space.
6. Renegotiate or switch merchant account providers.
Businesses that accept credit cards and electronic payments get charge a fee and or rate for their transactions. Depending on your monthly charges, you can be paying thousands per month in fees just for being able to accept credit credit / electronic payments. Talk to your merchant provider and renegotiate your rate or look into switching and saving. Many merchant providers will absorb the fees of a contract in return for locking in with them over a certain period of time.
You cannot run a business without having overhead, but the operating costs in the above post can be minimized or even cut out completely, allowing you to increase your bottom line. As long as you run your company like a well-oiled machine, and have your business expenses systematized, your company will have the best chance at succeeding.