Ask any business on the planet what they hate the most and they will say overheads. You see, it doesn’t matter whether you are Microsoft, Facebook or a small business with an even smaller market share. Everyone is fighting the good fight on a daily basis.
In all honesty, this is where the similarity between you, Facebook and Microsoft ends because cutting overheads, for them, is not do or die. As a small business, you need to cut costs to stay afloat. Sometimes, the profits are just not what you imagined, so you need to get creative to keep up with the competition. Now, most bosses will opt for the tried and tested methods of cutting back, but where is the fun?
Nothing beats imagination and innovation when it comes to solving a problem.
#1: Negotiate Your Office Space
Among one of your biggest overheads is rent. When you think about it rationally, you are wasting a lot of money on leasing office space. Most businesses only use their offices for eight hours a day, Monday to Friday. Instead of saying that’s just how it goes, don’t take no for an answer. Get in touch with the estate agent or the building owner and ask to negotiate terms. If you have signed a contract, getting a new deal can be difficult. But, there is no harm in asking. You never know, the building owner might want to come to a compromise, too.
#2: Sublease Part Of The Building
As long as the contract doesn’t outlaw subleasing, it is a fantastic way to save money. In fact, it is a fantastic way to make money. Do you work in a big city? If the answer is yes, you have a lot of available options. Office space in the big cities is few and far between, so the demand is always very high. As the subletter, you can control how much you lease the space for, within reason of course. If you set a competitive rate, you can offset one of the most expensive expenditures in your entire business.
#3: Shut It Down
In this world of technology, do you need office space? The answer is important because it can save you a fortune. The conventional business path is to lease business premises as soon as you have the finance. An office gives you a reputation and makes you look more professional. However, that was then, and this is now. There are that many online businesses in the industry today that clients and consumers are desensitised. They don’t care if you run your company from an office or a coffee shop as long as you do what is asked.
# 4: Slash The Wage Bill
Unfortunately, the next biggest expenditure on the horizon is labor. Labor costs such as wages amount of a huge percentage of costs. And, the only way to lower them is to start letting go of employees. You have to be pragmatic and look at the company and see who you can and cannot do without in the future. Who is essential and who is making up the numbers? All of the people in the latter category need to be excluded from the wage bill.
#5: Merge Job Roles
The problem with getting rid of an employee is that it leaves the role unattended. Okay, it might not be the most important position in the company, but it still needs completing. Thankfully, the answer is simple. Merge the role with another role in the company that is already active. The person who takes on the job gets added responsibility, and you get added efficient within the company. Of course, you will need to increase their wage as an indicator of their new role. But, that is cheaper than hiring an extra body and forking out on two wages.
#6: Embrace Technology
Technology is that good in 2015 that it can do the job of a person. In fact, the best technology can do the job of two to three people. As a result, it is essential that you embrace technology to cut costs. The initial cost of the software or hardware might be expensive, but it is peanuts compared to the money you will spend on three extra employees. Plus, technology is brilliant at organising businesses and making them more efficient. When it comes to cutting costs, efficiency is your best friend because you have no waste.
#7: Roll Electronic Bills Into One
Your business cannot survive without a couple of essential electronics. A high-speed internet connection, a phone line and cable TV all help businesses communicate and keep up to date with the latest developments. As you well know, they are expensive. The initial cost may seem low to begin with, but it adds up at the end of the month. So, how do you cut these costs? You roll all the costs into one. Scour the Internet for companies that offer cable TV, high speed Internet and digital phone bundles for a fraction of the price.
#8: Compare Energy Bills
The same goes for your energy bills. Again, gas and electric are unavoidable in business. But, that doesn’t mean that your current energy deal is the best one for you. The great thing about energy companies is that they are always trying to outdo their competition. To a degree, they will come up with a price that is lower than the competitors because they value new business among anything else. The contract may stipulate that the price increases after a while, but then you can just move to the next supplier. It is a cycle that never ends, and that saves you a lot of money on energy.
#9: Go Green
Green is not only fashionable – it is practical. For example, a paperless office is important for efficient communications, but it also saves money on paper. Paper may seem like a small outgoing to the average businessperson. However, you know that the smallest cut can make a big difference.
It is not going to be easy, but it is necessary. So, make sure you cover every base and think outside of the box.