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.