All businesses have to cope with the problem of running costs. But running a business often costs nearly as much money as it makes – or so we’re told. But is that true?
All too often business leaders get coaxed into thinking that their business costs are necessary. They start spending money because they believe that it is necessary to make money. Yet, often, this spending is unnecessary and cuts into profits. If your business falls into this category, it might be time for you to reevaluate your spending. The following are ways in which you can get the cost of your overheads without ruining your business.
Review Your Expenses
Go and have a look at your accounts and find out what your expenses are. Write down a list of your expenses, and then review it to see which expenses are too high or no longer necessary. Pay particular attention to your utility bills. You may be paying more than you need to. Prices charged by electricity providers tend to vary a great deal from state to state. And now the market for electricity has been opened up in the US, the decision can be even more complicated.
There are consultants, however, who specialize in helping companies make the right choice of supplier. And this helps them to lower the costs of their overheads in the long run, without jeopardizing their business plan.
Reduce Your Office Space
The world is changing fast. Thanks to new technologies, like teleconferencing, most companies don’t need an expensive downtown office. In fact, the downtown office is more of a drain on your finances than it is an asset. Consider whether you need that particular office space. Would your company be better served moving somewhere smaller and out of town?
Of course, you might decide that you don’t actually need an office at all. Perhaps your business can be run entirely online. And perhaps you could employ people all over the country to work from home. This pushes down your operating costs significantly while increasing your competitiveness.
Evaluate Your Third-Party Contracts
If you’ve been in business a while, there’s a good chance that you have built up a few relationships with other companies. Those relationships no doubt served an important purpose in the past, but do they still? If you rent out equipment, ask yourself whether you really need it. If you pay retainer fees to various service providers, again be honest about whether you need those services going forward.
Remember, it’s highly likely that your business has moved on and that you just don’t need these services anymore. If you don’t need them, get rid of them.
A ream of paper costs about $8. And when you multiply that by the number of reams you get through in a month, you end up with a large figure. Going paperless is straightforward and cheap.
All you need is some type of cloud platform and shared access, and you can start getting rid of all those filing cabinets cluttering your office.