Business advice often focuses on the big picture. Have a business plan, create a memorable brand, earn customer loyalty, etc. All of that is very important, but often what separates successful businesses from failed ones comes down to math and costs. The more overhead costs your business has, the harder it’ll be to keep your doors open during off-seasons or downward economic turns.
Businesses that can keep their operational costs low, however, are much nimbler. Having fewer costs allows your business to profit more from each individual sale, and it makes it easier to make safer long-term business decisions. If you are interested in reducing the overheads of your business so you can reap some of those benefits, here’s what you can try.
1 - Go green
Utilities are a big part of the overhead costs of most businesses. You can reduce how much you spend every month on electricity, water, and other utilities by switching to greener solutions. LED lamps are more energy-efficient than the alternatives, there are modern flushing systems that will allow you to waste less water in your store’s bathrooms, and solar panels can help your business meet some of its energy needs. You may even be able to sell excess solar power back to the local grid for profit.
The downside of green solutions is that they often require a big upfront investment, which means they take years to pay themselves. But depending on the realities of your business, the investment may be worth it.
2 - Invest in accuracy
It’s hard to reduce overheads if you are not sure what they are. A good accountant or financial management software can help you keep track of every expense, and make suggestions as to where and how you can cut costs. This does mean that you’ll likely have to spend money to save money, but given that tracking your finances will also help with tax paperwork, this is usually worth the investment.
3 - Invest in returning customers
It’s much cheaper to sell to people who have already bought from you before, simply because it generally takes less effort to get them back into your store. This varies depending on the type of business you run — an used cars salesman can expect to sell cars to the same person twice a month — but if your business model allows for customers to keep coming back to your store, then you should encourage that behavior as much as possible.
Not only will it help you save costs on marketing, but regular customers also help businesses survive when sales aren’t going well.
4 - Outsource more
You likely could be outsourcing a lot more than you realize. Online tools have made this easier than ever. You can now hire accountants who live on the other side of the globe to help you, have personal assistants who help you manage your life entirely online, and even outsource your entire IT department to a company that offers business IT packages.
On top of helping you save money, outsourcing can give you access to high-level professionals who you might not have been able to justify hiring as part of an in-house team, simply because you’ll be sharing their time with the other companies who hire them.
5 - Negotiate your credit card
Easy access to credit is a big part of what allows businesses to stay flexible and thrive, so don’t take it for granted. It’s wise to call your credit card provider and see if you can get a better deal every so often. You can also continually price shop and compare your options in order to make sure you’re not missing a good credit card deal being offered by another company.