Throughout this blog I will be listing 5 simple ways for your business to lower your overheads. A fundamental way of keeping healthy cash flow is to ensure the money coming out of your business aligns well with the margin being made. Therefore, it is key to make sure your overheads stay lower than your margin. Lower overhead ratios provide business owners with a competitive advantage. A low overhead rate will allow you to better price your products/services; thus, making you a more appealing option than your competition. Likewise, small overhead costs are more likely to allow you to increase your profit margins!
Frequently evaluate company costs
To begin with, you need to ensure that you are keeping on top of all your existing costs. You can do this by evaluating them each individually and diligently. This allows you then to review where you could be making cuts. Keep an eye out for expenses that are not imperative, too expensive and could be found cheaper elsewhere. Finding better alternative deals for your companies overheads could make all the difference to your outgoing costs.
Elect/hire an official purchaser
An effective way of finding these above-mentioned deals would be to propose the idea to a bold member of your team to be assigned to become an official purchaser. Alternatively, if your business has the funds, you can employ an experienced buyer with existing negotiation skills. Benefits of having your business its very own bargain hunter is that they are far less likely to settle for your local mundane merchant. Even better, they will not be afraid to search around and negotiate for the best deal.
Another way to cut down on your costs would be to go paperless as a company. Not only does this help the environment and as a bonus to this also build your brand image; but this also eliminates the costs of the paper itself. In addition to this, the storage your company pays to store the plethora of files and documents. These documents could instead be more efficiently stored onto a network drive. This space can now be put to better use or better yet be sublet out for more cash for your business.
Sublet free space
To add to my above point, subleasing is a wise way to raise your funds if you have the facilities for it. Your office may have empty space, such as rooms or potentially even floors! So, if this applies to you and you haven’t already considered this income option, you definitely should!
Invest in energy-efficient lightbulbs
Another environmentally friendly method of lowering your overheads is to change to energy-efficient lightbulbs. Although they are expensive to begin with, it won’t be long until these gems start to pay for themselves. With the payback time being “10 weeks if you use lights for four hours a day” says retired engineer Rodney Birks in the Guardian.
Alternatively, if you are struggling with your overwhelming overheads and could benefit from instant relief, we are here to help with our range of loan and financing options. Please feel free give a member of our team a call on 01494 611 456 or email email@example.com, we would be happy to chat with you!