Cut Your Company’s Overhead With These 5 Strategies
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No business can completely avoid overhead costs. Even the leanest operations in the world need to invest in electronic equipment, communications services and basic utilities such as water and electricity—or pay a commercial landlord or coworking space to address all those costs.
Nevertheless, it’s possible to deeply cut overhead costs without sacrificing productivity or production quality. Here’s a look at five straightforward tactics that apply to small, midsize and enterprise-grade companies around the United States.
1. Implement Efficient Policies
By definition, efficiency leads to savings. Efficient office policies can substantially reduce overhead costs in a variety of areas, such as:
Printing: Switching to double-sided printing cuts your paper costs in half.
Lighting: Phasing out incandescent light bulbs and energy-hogging fluorescents in favor of efficient LEDs can significantly reduce power costs. So can installing timers or motion sensors, so that lights automatically turn off in areas that aren’t in use.
Telecommuting: Giving employees the option to work from home on certain days reduces driving, which saves gas (a cost to employees) and reduces traffic (making more time for everyone else on the road).
2. Use A Telephone Answering Service
Many business owners are surprised to learn just how versatile telephone answering services really are. A telephone answering service can significantly reduce after-hours burdens on your staff, simplify your logistical footprint (possibly reducing labor and management costs) and even allow you to replace on-site reception staff with virtual receptionists. If your company handles lots of inbound calls, an answering service is definitely worth looking into.
3. Re-evaluate And Renegotiate All Outside Contracts
No matter how fruitful or long-lasting the relationship, or how loyal the outside party, it’s important to periodically re-evaluate all third-party contracts to ensure that you’re getting good value for your money. Don’t be afraid to cut ties with contractors that routinely underperform, or to ask for discounts from contractors with whom you’re generally happy—for instance, if you can guarantee higher order volumes, ask about a per-order price cut.
4. Transition To Digital Record-Keeping
Paper records take up space, use lots of resources (paper, folders, cabinets) and are loss-prone. Digital records held on physical storage devices and in the cloud are certainly not without their own problems, but they’re generally more secure, less wasteful and cheaper than their analog counterparts. If you haven’t done so already, research secure cloud storage options and implement a transition plan.
5. Take Up Less Space
How much office space do you really need? That’s a tricky question with no easy answer. Space costs money, so it’s in your best interests to reduce your footprint wherever possible. At the same time, trying to cram more employees and equipment into less space can damage morale and lead to other intangible downsides.
The best rule of thumb is to not let your space get ahead of your company’s growth. In other words, look for office space that fits your company’s needs in the present to near term, not its needs as you expect them to look in five years.
How are you reducing your company’s overhead costs?
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