As a business owner or manager, it is on you to ensure that every expense you incur is the lowest it can be. Since overhead is an expense that never goes away and is there regularly, it is one of the most common expenses people look to reduce when taking on expense reduction initiatives.
In this post, we are going to cover 9 ways to keep your overhead expenses low and improve the bottom line. We will do this by evaluating existing contracts, upgrading lighting systems, and improving productivity and output levels.
By the end of this post, I hope to give you at least a few solid ways to actionably work on in your business to reduce those nasty and expensive overhead costs. So with all of that said, let’s get into the first on this list…
1. Look at your Subscriptions
Overtime it can be easy (way too easy) to pick up more and more services and subscriptions. Sometimes a department may think they need it, but 3 or 4 months down the line they forgot it even existed. For this exact reason, you will want to check in with everyone in every department on what services / programs they have bought, whether they use them or not, and finally; if they can be canceled or not (and why).
Depending on how long your company has been around and how big it is, you may be able to get rid a lot of wasted money going out the door without any practical use.
2. Go paperless
Going paperless not only will reduce your overhead expenses related to paper, ink, and even energy costs; it will help your company be viewed as environmentally conscious.
Making it a default to be paperless is going to greatly reduce your expenses related to printing out physical copies. Of course some things will need to be printed out, but you simply won’t be printing out nearly as much.
3. Convert your lights to LED
Whether you work out of an office, a warehouse, or have 100’s of retail locations; you can benefit from converting to LED. LED technology in all commercial and industrial applications makes sense on every level. It will reduce energy consumption by up to 75%, increase your lighting systems lifespan by 2-3 times, and generally provide better quality of light.
On top of that, instead of entirely replacing your lights and the fixture it is in (which is costly), consider a retrofit kit. Retrofitting allows you to convert to LED cheaper than an entire fixture replacement would cost. So if you would like to convert and realize the cost saving benefits that LED will bring to your building, consider retrofitting your existing lighting system.
4. Don’t cheap out on an accountant
Although it may seem counter intuitive to increase spend on your accountant, don’t let this huge mistake cost you.
Think about it; is it really worth cutting your accountant costs by 25% just to end up paying more in the long run through taxes, improper filings, and any other issues an uninvested accountant may cause? Probably not, and this is exactly why this is one area you should not cheap out on. It will only cost you in the long run!
5. Downsize if you can
Do you really need those 3 extra rooms in your office? Or how about that extra couple aisles in your warehouse? If you don’t own the building, paying for the extra space is, more likely than not, costing you. By downsizing, you will likely be able to pay less to operate in the building you work out of.
The only time you shouldn’t listen to this tip is if you are rapidly growing and plan to fill that empty space in the near future. Otherwise for the slow movers, you should probably downsize to what you will fill for the years to come (along with thinking about how to become a fast mover).