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XendooRetail Services Accounting 6 Ways to Cut Overhead Costs
overhead costs

6 Ways to Cut Overhead Costs


Every business has to spend money in order to make money. Here’s how to keep those ongoing expenses from getting too high and impacting your bottom line.


Take a fresh look at every single expense.

Chances are, some of them have become a habit but can now be either eliminated or achieved in a more cost-effective way.


Re-negotiate supplier and vendor contracts.

  • There may be things in there you don’t need any more.
  • On the other hand, you may find that buying more services from one company costs less than piecemealing it out to several suppliers.
  • Ask for a better deal from existing suppliers.
  • Shop around for more favorably priced suppliers.


Allocate more marketing efforts to free or low-cost channels.

  • Word-of-mouth and tell-a-friend promotions to existing clients.
  • Social media campaigns.
  • Strategic partnerships with other local businesses.
  • Employee sales competitions.
  • Testimonials from satisfied clients.


Centralize purchasing.

One person in the company should handle it all, from office supplies to phone/internet providers to equipment rentals. This person will:

  • Prevent duplications, unexpected shortages and confusion.
  • Be good at wangling better deals, concessions and discounts.
  • Shop around for the best offers.


Re-think your office space.

  • Do you really need to be leasing so much space?
  • Do you have too much inventory/equipment on hand, taking up storage space?
  • Is there another space available that offers equally good access for current and prospective clients at a lower rate?


Control labor costs.

  • Avoid paying overtime by fine-tuning scheduling or converting to part-time employees.
  • Reduce turnover and hiring expenses by maintaining a happy, fulfilling work environment.
  • Cross-train employees to fill more than one role.
  • Prevent time theft with an app that tracks actual hours worked.


Solving the overhead problem is all about baby steps. Chip off a bit here, a bit there, and keep a year-round watch on expenses. It will all add up to some nice, healthy profit margins.

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