How are your day-to-day expenses in running a business? Every business owner knows that for a business to succeed, it is imperative to reduce overhead costs. These overhead expenses are independent of revenue and must be paid whether the business is in a profit or loss position. Figuring out how to trim your overhead costs will decrease the revenues necessary to break even or make a profit, provide greater flexibility in long-term pricing strategy and improve cash flow. Here are New Wave Gold Coast Accountants tips to get helpful ideas on these strategies now!
Review your costs
Revisit your current list of overhead costs. You should be able to star items that are no longer necessary, too high in price and open to efficiencies. It’s always a good idea to get a handle on where you are with your costs before you try and make sweeping changes. In determining how you can save up further for your business, you can also involve your key employees. Ask them for their input on where money can be saved. Depending on the size of your organization, you might even want to offer incentives for the idea that saves the most, the idea that is the most innovative, etc. This type of collaboration often leads to more opportunities than you could find on your own.
Eliminate subscriptions and memberships
Over time, you’ll see yourself adding subscriptions and memberships due to your growing connections in the industry. It may seem like only small expenses are involved in a single affiliation. However, when you put together these items, they rapidly build up and go unnoticed as they often appear on different schedules and expense reports. To avoid unnecessary charges, review all your affiliations and be assured that they are actually necessary and contribute regularly to the profitable operation of your company. If not, it’s time to eliminate them.
Use in-house equipment
If repair and maintenance is a significant cost in your operations, consider hiring a mechanic or specialist who can do all the necessary job in-house. With this employee in tow, you will have better, regularly maintained equipment that may allow you to avoid expensive replacements until later.
Effectively spend on travel costs
In this digital age, you no longer have to be physically present to take part in meetings. You can now just hold teleconferences where possible, rather than spend some time and costs traveling. If business trips are necessary, you can try to economize with advance bookings for transportation and last-minute booking for hotel rooms. You can also affiliate yourself with an agency who can do all the travel details for you at a reasonable discount rate.
Rent out under-used resources
One smart way of making additional money in your business is to put for rent the equipment or vehicles you do not use constantly. For example, maybe you have storage or desk space you need only at certain times. This could definitely gain you a rental income. Check your lease to make sure sub-letting is permitted.
Switch your online payment services
If you only make modest web sales, online payment systems like PayPal or Clickbank still allow customers to make payment transactions for businesses. And instead of a monthly fee, you’ll pay a small charge per sale.
With everything almost available on digital, you are now able to eliminate paper in some aspects of your business. This allows you to save on printers, ink/toner, paper, and storage space. You can just back up all of your documents to the cloud or on a drive, then shred any unnecessary files. You can even sell the filing cabinets that held them and pocket a little extra cash.
Assess your staff
Chances are there are one or two members of your team that are underperforming or have been doing redundant work. Laying someone off hurts, but keeping more employees than what you actually need will only be a drain on your resources. It also doesn’t give the employee a chance to find something new or different that might be better suited to his or her skills.
Engage help from outside
When internal resources aren’t adequate to perform the reviews and analysis necessary to reduce and control costs, consider hiring an objective outside firm to benchmark and assess current costs. Here at New Wave, our Accountants Gold Coast can assist you with cash flow planning, forecasting and strategies to improve cash flow. Through our cutting-edge technology, we can help you with time savings and efficiency gains, allowing you to keep your overhead expenses always in check. Contact our Accountants Broadbeach today for a free quote!