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The global pandemic has changed millions of lives around the globe. Restriction in movement and halt in operations took a massive toll on every sector of the worldwide economy. Companies are now looking at achievable strategies for continuous marketing and business growth. And one way of dealing with this unfavorable economy is to focus on reducing overhead costs.
How to Reduce Overhead Costs?
Your overhead costs are indirect costs associated with running your business. However, it is not directly related to manufacturing a product or service. For example, if you have a service-based business, you will incur overhead costs such as rent, utilities, and insurance. This is to maintain your operation and achieve optimum productivity.
It’s important to note that the higher your overhead cost is, the longer it takes you to achieve your goals. It would be best if you planned on how to reduce overhead costs. This ensures that most of your expenses go directly toward producing your product or service. The following tips can help you minimize your overhead costs in your small business:
Go paperless
Having many hard copies of documents increases your printing and storage costs. You may outsource data entry services to digitize your data to reduce it. Data entry services can help you store and organize your data in a readily accessible manner. With this service, you can also ensure data errors can be efficiently addressed all the time.
Going paperless means you don’t have to spend money on office supplies like paper and ink cartridges. Moreover, you don’t need to give up office space for your file cabinets and documents. You can store critical documents in the cloud or on disks with data entry services. Additionally, this helps you to keep your data in a secure location.
Make good hiring decisions.
The aftermath of the global pandemic may force you to reduce your company’s workforce. With a small crew, it’s a challenge to increase productivity in the workplace. However, it all comes down to your hiring decisions. When hiring new employees, ensure they possess multiple skills that can bring value to your company.
Hiring the best talent during a pandemic is a tedious task. With a restriction on movement, assessing candidates thoroughly is a challenge. However, you can outsource your recruitment process to a reliable service provider. Having a recruitment team in place will help you process successful employee recruitment.
Hire a virtual assistant.
You can grow a more flexible workforce through the help of virtual assistants. This is true since, nowadays, most jobs are done remotely. Hiring a virtual assistant can help you save money by not having to hire additional part-time staff. They work from home as effectively as regular employees and help you keep your financial resources under control.
From social media management, scheduling appointments, and managing events to personal errands, an outsourced virtual assistant can significantly assist. When hiring a virtual assistant, clearly communicate your preferences and work style. This will help them know what to expect from you and how to perform their tasks best.
Sell products on affordable platforms.
With so many brick-and-mortar stores closed, eCommerce has encouraged shoppers to purchase products at home. Leveraging the power of eCommerce in these challenging times is in your best interest. By selling products online, you can achieve profitable long-term growth. This platform will also provide professional and helpful assistance to your customers before, during, and after every sale of goods and services.
There are reasons why eCommerce can help you reduce overhead expenses. First, an eCommerce operation doesn’t require a salesperson to sell your products. Second, you don’t need a cashier to make your sales online. Lastly, you don’t need a brick-and-mortar store for customers to visit. Hence, eCommerce is a smart move since they require fewer resources than traditional retail stores.
Invest in tax and accounting professionals.
As a small business owner, you hope to pay as little income tax as possible. However, it’s not your expertise to research all possible tax deductions you may qualify for. That being said, you need a tax or accounting professional with extensive tax preparation knowledge. These professionals can help you identify potential deductions and minimize your income taxes.
Accountants are responsible for securing accurate business records on your finances monthly. It’s important to note that deductions can be disallowed if business records do not adequately support your expenditures. You will end up paying more taxes than the Internal Revenue Service (IRS) requires. Invest in accounting and finance operations to reduce your taxable income or receive a larger refund.
Outsource specific duties to third-parties
Consider outsourcing to third parties instead of hiring new employees for specific HR or administrative tasks. This allows you to work with professionals without the attached recurring benefits. Mandated employee benefits are one of the costs that add to payroll expenses. One way of cutting these staff benefits is to work with an outsourcing service provider.
An outsourcing service provider can help you carry out some business functions. These include but are not limited to payroll processing, appointment setting, debt collection, and even reminder calls. Commercial Outsourcing Service is proven to cut at least 70% of labor costs. It improves your bottom line and cash flow, saving up payroll, rentals, and utilities prices.
Reduce Overhead Costs via Outsourcing
With the pandemic around in place, the potential for your business to flourish is much limited. This is true if your workforce is dwindling and you keep losing fresh perspectives of business solutions. However, you could still tap on professionals, like Magellan Solutions, to give you a helping hand. Doing so can free up time and focus on growing your profit margin.
Outsourcing some of your business functions is the best way to cut overhead costs. However, finding a reliable outsourcing service provider is a daunting task. If you prioritize high-quality service at a low expense, you may consider the Philippines. It is an excellent choice for its key competencies, such as its educated workforce, efficient labor practices, industry expertise, low labor cost, and strategic location.
Do you want to have the best cost-saving strategy to reduce your overhead costs? Fill out the form below to get a free consultation. Or you can contact us.
