Business

Reducing Business Overheads – Advice From An Expert

Comments Off on Reducing Business Overheads – Advice From An Expert 20 December 2010

In these challenging economic times, it can often be hard for businesses to stay afloat with reduced incomes and increased costs. One way you can help your business is by keeping your overheads to a minimum. Compare your bills for the past few years and see if there’s a big rise. If you see a rise that exceeds inflation and company growth, it’s time to make some cutbacks. Look at areas such as rent, electricity, water, stationery and other miscellaneous office costs.

Before cutting anything, get your employees involved and ask their opinions. Someone working as a line manager on a manufacturing plant will, for example, probably know much better than their boss where savings in spending can be made in their department. It will also encourage employees to think more generally about how they use resources. Plus, all employees like to feel appreciated and they will generally be more encouraging and helpful if you take their views into account when you’re looking to save money.

You should also consider updating your business practices: there are some great recent developments in technology and energy efficiency that every savvy entrepreneur should make use of. Going green may cost a bit up front as you have to buy the new equipment and invest in technology, but it will save you money in the long run as well as reducing the amount of waste you produce. Look at switching to energy saving light bulbs, installing new recycling practices and investigating water recycling systems.

Also think very carefully about what you need to buy before you buy it as this can often lead to excessive spending. It’s often the case that many things you buy, you don’t really need and so never use, instead leaving them to gather dust. Ask any employees responsible for purchasing to be as thrifty as they are in their personal lives. Tell them to compare different quotations before committing to anything and to investigate whether you could get a discount on things if you buy in bulk.

Lastly, you need to be ruthless about what you do in case any big changes are needed. Hold an audit to look at everything you need to spend money on, then lose everything you don’t. Also compare different energy tariffs available to businesses as you could save money by switching energy provider. If there’s a lot of unused space in your office, you could also consider renting it out to another firm and ask them to contribute to your rent and utilities.

Read On : Business Electricity

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