Overheads are part of running any business, but they can mean the difference between success and failure if you have a small to medium enterprise. Your gross profit margins can be great, but then they just disappear as you are paying out for wages, premises costs, motoring and everything else associated with running a business.
If you want to expand your business in the future, you need to keep your overheads as low as possible so that your accounts look impressive to a bank or prospective investor. It can take some planning and care to keep overheads low, and here are a few suggestions to help you.
Don’t buy or rent premises bigger than you need, as they will just cost you more to run. Remember that rates are charged on the square footage of your premises and that alone will be more expensive if your premises are too large. Energy costs are another consideration, because why should you heat space that is not going to be used?
As the biggest overhead after rent or mortgage, you need to keep the usage as low as you can. You should also be looking at and comparing small business energy tariffs because even if your premises are just the right size, that does not mean you are getting a good deal.
Comparison sites like Utility Bidder can help you with your energy costs by getting you quotes from some of the top suppliers for the best deals around.
Outsource Some Tasks
Outsourcing some of the tasks is cost effective and can give you access to expertise you might not otherwise be able to afford. Things such as bookkeeping, payroll, website content, social media management and many other things can all be done by freelancers who you only pay for the work they do.
There are none of the trappings that are attached to being an employer such as maternity pay and sick pay, and there are lots of online resources that can match you with the freelancers you need.
Consider Your Bank Charges
When it comes to bank charges for businesses, they can be very expensive. Businesses pay for all the personal accounts that are free of charge. Banks are in business just like you, and they have to make their money somehow.
Speak to different banks and you may well find a better deal than you already have ,and even when it comes to overdrafts and bank loans, it is possible to find a bank that will charge you less. They may even revamp the way you finance your business to make the cash flow easier too.
In Business to Make Money
Most business owners do not expect to become millionaires from their business, but they do hope to make a reasonable living. If you have your gross profit margins right and are making enough sales, this is entirely possible as long as you do not let the overheads get out of control and take all your money before you have had a wage yourself.