In business, revenue is everything. It’s the line in the sand between making it and closing your doors. If you are not closely monitoring your revenue and cutting back on needless expenses, you could be throwing money down the drain. For those with an incredibly tight profit margin, it can be difficult to see where your expenses could go for a trim. Included here are a few tips for reducing your company’s overhead costs and boosting revenue.
Rent, Don’t Buy
For young companies, it can be tempting to overinvest and set up shop for the long haul. You may believe that having confidence in your success can actually seal it in for you. Unfortunately, you may just be digging yourself a deeper hole to dig out of if things go south. One risk many companies take is by investing in real estate by purchasing their company’s office space.
The problems with buying a space right off the bat are numerous. Not only are you tying up cash in a long-term investment, but you are also closing yourself off to potential relocations as you define customer needs. In almost every circumstance, it is wisest to rent for awhile until you have the means to invest appropriately. While this could raise your overhead slightly month-to-month, it allows you flexibility, which can be invaluable.
If you already purchased a property and are unable to go back to the renting option, there are still great choices for you. One simple option is to sublet areas of the building or property to another business for additional income. For example, storage of some vehicles or tools by another company may be an option, or you may have a small office with a separate entrance that could be used by another local business. Consider your options to recoup real estate costs and keep your head above water.
As a new company, you may be incredibly zealous about getting face-to-face time with potential clients and investors. While those meetings are important, it is also crucial that you don’t go overboard on those expenses. Traveling too often can really rack up a scary overhead cost that could sink you before you’ve had a chance to try swimming. Cut back on your travel costs and prioritize your biggest fish to fry.
Perhaps the easiest way to reduce overhead costs is by having your employees telecommute. With how tech-savvy the modern employee is, most will find working from home an easy and desirable option. Imagine completely cutting out property leases, energy bills and office supplies from your budget? The reduction in overhead would be unimaginable! If telecommuting is an option, it can help your revenue go through the roof.
With current emphasis being placed on earth-friendliness, it comes as no surprise that going paperless could save your company thousands of dollars each year, if not more. While some customers may dislike this choice, most clientele will understand and be supportive of your cost-efficient and energy-efficient choice.