13 Best Overhead Cost Reduction Strategies

If you are having trouble sticking to a budget in your business then you may want to take a second look at your overhead. Here are 13 of the best overhead cost reduction strategies to help you:

1. Evaluate Everything on Record

The first step in reducing overhead expenses is getting a clear picture as to where your money is going. If you have an accountant, have him/her pull up an expense sheet detailing all of your overhead expenses. If you use bookkeeping software instead, then gather this crucial information on your own.

2. Don’t Look for Just One Area to Reduce

Realize that there is likely no “magic bullet” when it comes to reducing your overhead costs. You are more likely to find that the best way to save money will come from a series of small adjustments, instead of one large one.

3. Have and Employee Brainstorming Session

Your company’s best resource is your employees. Their advice can lead you to savings that you couldn’t see on your own. You could even provide a bonus incentive for the idea that saves you the most money.

Computer Keyboard with cursor shows Paperless

4. Go Paperless

While you can’t completely eliminate paper from your business, simply backing up your files to the cloud or to an external disk and shredding the excess paper can be a real boost to your productivity and peace of mind.

5. Cut Under-performing Staff Members

If you have staff members that aren’t living up to their full potential, then it may be time to let them go. This may also be better for them since it will free them to find work better suited to their talents.

6. Find Credit Cards With Better Rewards

Make sure that you are using a card that gives you the most rewards possible in an area that your business uses. If you don’t do much travel, for example, you may want to switch from a card with travel rewards to one with cash back instead.

7. Outsource Your IT Department
There are large costs (and risks) associated with maintaining an in-house IT department. New advances in technology allow you to take advantage of outsourcing services for all of your IT needs. This can involve data warehousing, vendor management, and many other areas that help you meet your needs without overspending on staff and computers.

8. Sublease Your Office Space

If you have your own office space, you might find there are rooms (or even whole floors) of space that you aren’t really using. Consider leasing this space to another small business for extra cash-flow.

9. Downsize

If you realize that you don’t really need as much space as you have, consider downsizing. There is no shame in relocating to a cheaper area or reducing the size of your office space to accommodate your true needs.

10. Restructure Employee Benefits

You may want to look into getting health savings accounts for those employees who are over fifty-five years old. This will help to reduce health care costs for aging employees.

11. Make Employees Multitask

You should be proud to have some extremely talented people working for your company. Put that talent to its full use. You may have a customer service rep with a degree in accounting or a person in IT who shows an aptitude for management. You may be able to use different people in more than one area to maximize your money.

12. Reduce Travel Expenses

You may have employees who take advantage of expense accounts without even knowing it. Get a full travel expense report for the last year and see if there are any areas that you can cut down on.

13. Plan Ahead

While the future can never be predicted with complete certainty, its best predictor is still the past. Track all of your expenses for as long as you have been in business. Knowing what’s coming and when to expect the most money to cover any extra expenses can save you a lot of money in the end.

If you follow these simple steps you will be on the road to saving money in no time. And your business will be more streamlined and efficient as well.