6 Simple Ways to Reduce Overhead

There are two ways to increase your bottom line: create more income or reduce the amount of money you spend on running your business. While marketing can go a long way toward increasing your day-to-day income, you ultimately have little control over how many customers come your way. Reducing your overhead, on the other hand, is almost entirely up to you. Tighten up on small and large expenses to increase the net profit you see on your balance sheet.

Service Contracts

Any machinery you own and operate is subject to breaking down, and many business owners have service contracts with local businesses, much like repair insurance for their ovens or computers. Take a close look at how often these pieces of equipment actually need servicing. If your machines are in good condition and rarely need servicing, it may be more cost-effective to cancel monthly service contracts and simply pay for repairs when they are needed. Survey employees and look to your own skills to find how much repair work you can do onsite without even calling in an expert. Many times a simple repair such as a blown fuse or need for reset can cost money that you didn’t need to spend.

Shop for Inventory

If you’re relying on one company or catalog for stocking your business, you may be missing out on some major discounts. Make a periodic review of every ingredient, supply and raw material you purchase for day-to-day operations. Check out the prices at competitors’ businesses. It may take a little extra time each month to generate separate orders for different parts of your business inventory, but you could realize a nice profit in the long run, simply by comparison shopping.

Use Part-Time Work

If you offer benefits to your full-time employees, determine whether many of the duties at your business can be performed by part-time workers. Part-timers get the same amount of training as full-time or salaried employees, but they often make less per hour, get smaller benefits packages and show initiative because of a desire to move up in the company. Two part-timers can do the work of one full time employee for a much lower fee, in most cases.


Unless you are running a business dictated entirely by phone orders, you may be able to get rid of your land line completely. Use Skype, Google Voice and inexpensive prepaid cell phones for all your business needs. You’ll make a good impression with clients when you offer communications at a high tech level, and save the cost of a business phone each month. The face-to-face impact of Skype alone can increase the effectiveness of any business meeting, and many prepaid phones are a fraction of the cost of a basic business land line package.

Brand Ambassadors

Advertising and marketing are a crucial part of any business, but paying for traditional ads can be a significant part of your monthly costs. Develop your best regular customers into brand ambassadors to create an almost-free advertising campaign. Offer customers goods and services when they bring in a certain number of new customers, or pay street teams in product to spread the word about your company.

Hire Multitaskers

Whether you plan to hire full time help or a crew of part-timers, concentrate on employees who have multiple skills. Specialists may have intricate knowledge of their subject matter, but a worker who can pitch in and do another worker’s tasks when needed is a more valuable employee, in the long run. If the second task is one that is rarely needed, you’ll save the expense of hiring a second employee entirely.


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