It does not matter how good your gross profit margins are if your overheads eat away at them and leave you with nothing at the end. It is easy to let the costs of running your business become too much, but there are things you can do to help keep them low. Then your bottom line will be more pleasant to see, which at the end of the day, is why you are in business. Here are a few suggestions that will help to keep your overheads as low as possible.
Energy bills can be a nightmare, especially if you are running equipment and machinery. You need to start by educating your employees to turn things off when they are not in use, and not to leave lights on in areas they are not needed. Something as simple as turning every computer off properly at night instead of putting it into sleep mode can save you more than 50p a week for each one. That might not seem much, but just count how many computers, printers and other similar pieces of equipment you have. Multiply that by 50p each and then by 52 weeks of the year and you may be surprised how much this could reduce your energy bills by.
You should also compare energy rates for business as these can vary greatly from supplier to supplier. Taking a look at comparison sites could save you a fortune on tariffs and it is well worth changing supplier if this is the case.You should do the same thing with your communication costs, and it is even worth comparing banks to see if you can get a better deal on their charges.
Often, the workforce is the biggest cost any business has, and you need to make sure that yours is as productive as possible to make the most of it. Happiness appears to be the key where your employees are concerned and making sure they have a pleasant working environment.
The more productive your staff are, the less overtime they will need to work to meet your targets, and that could save you quite a lot of money.
There are some tasks within your business that would be cheaper if they were outsourced. This means you have access to the expertise you need without the cost of employing someone. Things such as bookkeeping, accounts, web design, and marketing are all examples of things that are often cheaper when they are outsourced.
Control Your Purchases
Controlling your stock might seem obvious, but it is not to all business owners. You should only buy supplies when you need them, or you could end up with big bills for stationery and materials that are just sitting in a cupboard or storeroom and not being used.
Regulate what is bought and when so that you have what you need when you need it, but do not have a surplus that you have to pay for.
The Hidden Costs
There are many costs in running a business that owners do not consider, and it is almost as if they are hidden away and will be paid regardless. Cutting your overheads will often need the cooperation of your employees to get the most effect, but it is well worth the exercise of involving them, as they may well have noticed costs that could be reduced that you have not considered.