Stop wasting money, it's time to manage your overheads
As a small business owner, you have a lot to consider when it comes to keeping your business running smoothly, especially after all the hard work you've put in. While we don't like to say that money is everything, costs can play a massive part in the success of your business and overheads can become a money pit if not monitored and revised regularly.
We know that you're always looking for ways to increase profits and managing your business expenses is a great way to do just that! Check out our tips below on how to get started.
What are overhead expenses?
The first step in managing your small business overheads is understanding them. Generally speaking, overheads are any outgoing expenses for your business outside of labour, materials or customer billing. They are the expenses you'll still have even if business is slow.
Overheads can be fixed, variable and semi- variable:
Fixed overheads are the same costs every month and are not affected by your businesses success. Expenses such as rent, mortgage payments, insurance and any Government fees are included here.
Variable overheads can be affected by business activity. When you are busier these are expected to increase and decrease when business slows down. Variable overheads costs include shipping, legal fees, materials, supplies, equipment maintenance and advertising.
Semi-variable overheads are present within your business no matter how busy you are. These costs can have a base rate that you're locked into, and a variable rate on top that depends on your use. Some examples of semi-variable overheads include some utilities, vehicle use and overtime pay.
Tips for managing your overheads
- Set out time each month to review your overheads, understand the current costs of running your business and make changes where needed.
- Research the market and get quotes from the different providers you'll need to utilise in your business. This can ensure you're getting the best deal on the market at that time.
- Understand your impact on the environment. Are you using excessive power or stacks of paper when you have the option to go digital?
- Set timers for your lighting and equipment to automatically turn off while you're closed.
- Reassess your advertising efforts to ensure they're beneficial to your goals and are providing a return on investment.
Don't let your overheads hold you back from long term success! By taking a small amount of time each month you can ensure you are aware of and on top of the outgoing cash flow for your business. Need a little help implementing streamlined processes within your business? Helix Planning offers Business Coaching and Business Advisory services for just that!
Get in contact with us to find out more.