4 Easy Ways to Reduce Your Small Business's Overhead Costs-min

4 Easy Ways to Reduce Your Small Business’s Overhead Costs

Keeping your costs under control is very important if you own a small business. You’re probably operating on very tight margins already, so your operational costs strongly impact your profitability. Thankfully, there are tons of ways to save money, and it doesn’t always require massive changes to your operation. Instead, it’s usually a matter of identifying waste, using the right equipment in the right way, and making minor changes to how you do things. Here are some easy ways to reduce your small business’s overhead costs.

1. Pick Your Insurance Provider Wisely

Shopping around is essential when it comes to insurance for small business owners, so choose your provider carefully. Look at least three providers and their packages, and then compare quotes. Make sure that you check their reviews too, as this will give you an idea of the level of service and responsiveness you can expect. You may also want to look at what type of insurance for small business owners you need and if you’re getting unnecessary coverage. For instance, not all businesses need both business liability and professional liability insurance. So, review your policy and see if there are things you could take out.

2. Look for Different Providers

Shopping around is also very important when dealing with utility providers. If you’ve been with the same energy provider for many years, for instance, then there’s a strong chance you can find a better deal somewhere else. Don’t expect your energy company to give you a discount because you’ve been loyal to them. They care more about getting new clients than keeping old ones, so flex your purchasing power and start comparing quotes. You can do it manually or go through a comparison site. You can then use the quotes you’ve gotten to leverage negotiations with your current service provider.

3. Automate

You need to look at your operation and see what you could automate. We’re not talking only about machinery here either. Things like marketing, tax reporting, deductions, invoicing, and task management can all be done through automation. For example, you could use an agile management tool like Kanban to set up tasks in advance and allow your employees to pull them in order of importance. Or you could use a CRM to send follow-up messages after clients have made specific actions. All of this will allow you to save time and money.

4.      Outsource

Small businesses also need to understand the importance and power of outsourcing. If you have someone on your books to handle your IT 24/7, then there’s a strong chance that you could save by switching to a managed solution. The same goes if you’re handling things like payroll or accounting in-house. Only the most prominent companies have their accounting department, and even they will outsource sometimes, so don’t pay someone for a job that only requires a few hours of busy work per week.

These are all simple things that you could do today to reduce your overhead costs. Try to see if you implement any of these solutions in your organization, and always look for ways to save even more.


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