4 Ways to Reduce Overhead Costs for Business Owners
It's no secret that running a business is expensive. The first step to fast tracking your company’s profitability is to find ways to reduce overhead costs.
This infographic outlines the 4 ways to reduce overhead costs.
What is Overhead Cost?
Overhead costs refer to the operating expenses or the expenses related to the day-to-day business operations. These are expenses that may either be fixed annual or monthly costs, such as insurance or salaries. It can also vary from time to time due to the volume of business, such as marketing and sales promotions.
4 Tips to Reduce Overhead Costs
1. Reduce Office Rent
A study showed that a company’s office space is typically its second largest cost. Depending on your city’s real estate conditions, you may want to consider finding a similar office space in less expensive neighborhoods or even negotiate better lease terms with your landlord to reduce overhead costs.
3. Reduce Staffing Costs
How do you manage overhead expenses during slow periods? One way to do so is to reduce staffing costs. Another way to manage your staffing requirements is by hiring contractual staff or outsourcing certain tasks. In these cases, you can maintain flexibility and lower overhead costs compared to keeping a full-time employee.
3. Save on Utility Costs
The utilities, including electricity, water, gas and internet service are included in the company's monthly expenses. Going green and implementing eco-friendly measures can help lower these costs over time, since investing in renewable energy is often more cost-effective than relying on non-renewable resources.
4. Manage Insurance Plans
By managing your insurance plans, you can get a better handle on your finances and make sure that you’re spending money wisely. This will also help you avoid paying unnecessary fees or being overcharged for services.
One of the best ways to avoid paying these types of fees is by consulting reliable advisers and trusted sources who can help you check where you can safely cut costs.
Looking for ways to cut costs? You can rely on D&V Philippines. Our CPAs are well-versed in using various accounting software, so you can be sure that you're getting the data you need to make informed decisions. Contact us at firstname.lastname@example.org for more information. You can also download our whitepaper, Finding the Right Talents: D&V Philippines’ Solutions to Modern Accounting Firms, to learn more about our services.