The world of business can be totally cutthroat, and it isn’t showing any signs of slowing up. In fact, almost every sector of business is becoming more and more saturated by competition simply because technology has made the world a smaller place meaning the consumer has more choice to choose from. This can affect a lot of things in business but none more than your revenue.
As such, it is more important than ever to be able to maximize your profit margins and one of the most effective ways of doing this is to cut your company’s overheads. But where and what can you cut back on? Well, below are some great tips, tricks and bits of advice to get you started and underway.
No More Freelancers
So many blogs tell you that you can cut your overheads by relying on freelancers, but we don’t completely agree. Yes, there is serious value in outsourcing complex and expensive responsibilities, like handing over your tech requirements to a managed IT services company or your bookkeeping to an outsourced finance controller. But relying on freelancers is a dangerous game. Sure, they’re great for upscaling quickly, but they are not solely invested in your business and it can take some time getting used to your way of doing things. It could be easier to employ a junior intern, or junior staff, both of whom will work out cheaper over the long run.
Address Your Current Structure
This may sound kind of hard-boiled, but it could be completely necessary. After all, you don’t owe anything to anyone that isn’t pulling their weight. However, it could also be that you simply don’t need to have a workforce as extensive as it is currently. Staff wages are one of the biggest expenditures a company has, so if you can cut this overhead down while still producing the same amount – or same level – of work then you will see your profit margins grow organically. As such, take a look at each of your current teams and try and figure out a way to maximize their output, both collectively and individually, which could be a matter of trimming the fat and making it more streamlined.
Keep A Closer Eye On Expenses
Staff spending is often an area that gets abused because employees can abuse it. That doesn’t mean they do it unnecessarily, but they could certainly cut down on the amount they spend on the company card. This mainly alludes to things like travel and accommodation. However, other areas where expenses can be reduced is with company car policy. It may be cheaper for you to have a pool of cars that employees can use than to have company cars for individual employees. Other areas to reconsider are fuel, sustenance, and entertainment, all of which could have a spending cap introduced. The main issue with this, however, is the time it takes to oversee such a menial and time-consuming task, which will eat into your time. As such, give the accounts department new instructions and allow them to take the added weight of scrutiny. You’ll certainly see your overheads fall dramatically as people start to consciously spend less.