If you own or manage a business, one of your primary considerations is your budget. With all the tasks that need to be accomplished, it can be incredibly difficult to decide how much to allocate to each department. This is even more of a headache when employees start asking for more money for their respective teams.
Budgeting is made even more complicated by overhead costs. Everything costs money: from leaving the lights on to rental payments, there’s much to take into account. Cutting overhead costs is a fantastic way of increasing the amount of money available for other business activities.
In this article, we’ll go through 6 ways to do just that. Keep reading to learn how to decrease overhead costs and save money.
1. Track Office Supply Consumption
While it’s impossible to eliminate the need for office supplies, it’s possible to save money when buying them. When running a business, it’s vital to look for deals when sourcing items like Brother toner cartridges, stationery and printing paper. Failing to do so can hamstring your business in the long term.
Some ways to save money include comparing various suppliers and choosing the cheapest ones, taking advantage of bulk discounts and using a spreadsheet to track office expenses. Of course, it’s also vital to limit waste in the office, which can be accomplished by implementing policies for the proper use of office supplies.
While individual office supplies might not seem too pricey, costs can quickly add up. Making small changes to how you source and use these goods can have a massive impact on your bottom line.
2. Implement Office Sustainability Initiatives
Energy costs can take a toll on your business if not managed properly. In order to reduce this expense, you should implement office sustainability initiatives aimed at reducing energy consumption. Examples of this include turning off the air conditioner or heater at certain times of the day and using automatic lights that switch off when nobody is in the office.
To lower your energy bills, you can also take advantage of more efficient means of powering your office. For instance, replacing traditional energy sources with solar panels can drastically cut your costs, while also being good for the environment.
3. Automate Business Processes
Another way you can cut overhead costs for your business is by automatic processes that were previously conducted manually. This allows you to function with a smaller team and saves you on employee wages.
In 2024, there are plenty of business activities that can be automated. Some examples include paying wages, rostering, scheduling shifts and generating invoices for your clients. By allowing tech tools to take care of these activities, your workers can dedicate their time to tasks that require more critical thought.
4. Use a Shared Office
Paying rent takes up a large chunk of the overhead costs of a business. You can significantly reduce this overhead expense by swapping a single-company office for a co-working space. This is a great arrangement particularly if you have a hybrid workforce. If your entire staff rotates between working on-site and at home, you can save money by rotating the days on which certain employees come in, thus decreasing the space you need to keep your business running.
Co-working spaces often allow you to reserve desks and meeting rooms for limited amounts of time, which costs a fraction of renting a full office. Most modern co-working spaces also come equipped with everything your team needs to get the job done, including private workspaces, monitors and audio-visual equipment.
Co-working spaces are modern, fresh and hip, and your staff will love working in an environment that gives them the flexibility to alternate between working on-site and at home.
5. Take Advantage of Business Tax Deductions
Taxes are a constant in business. However, it’s possible to decrease the amount of outflow from your company, provided that you’re proficient at tax planning.
Tax deductions are a fantastic way of cutting overhead costs and boosting profits. You can claim these tax returns at the end of the financial year. In most cases, it’s recommended that you work with a tax professional.
As a business, you can claim deductions on anything related to the cost of doing business, including office supplies, rental costs and utility bills. If you’re running a smaller company, there are also plenty of deductions available to startups that can help you get off the ground.
6. Invest in Business Insurance
Overhead costs include unexpected events. Business insurance can help protect you against these unforeseen expenses and ensure that your company can keep going, even after disaster strikes.
Some potential costs that can be covered by an insurance policy include lawsuits, property damage due to natural disasters or shipping mishaps. While insurance might initially raise your expenses, we highly recommend signing up for a plan, as you can never tell when a calamity might take place.
In this article, we’ve shared six valuable cost-cutting initiatives you can use to reduce your business overheads. From tracking office supply consumption to establishing automation processes to save valuable man hours, there are many ways to decrease your expenses while still operating efficiently.
Implement the tips we’ve provided in this article to lower your overhead costs and boost your income.
