Tips for reducing overheads

Stop leaking money! Tips for reducing your overheads.

Feel like you’re constantly forking out money? Keeping a tight rein on your expenses will help you ride out any market downturns. Don’t cut corners though; instead spend smarter to boost profitability and maintain good cash flow, without compromising on the quality of your work.

Your profit and loss statement outlines how much your business has spent and earned over a particular time period. Go over your expenses with a fine tooth comb and look for costs that are no longer necessary or can be reduced. Here are a few things to look out for:

Renegotiate with your suppliers

Your business has probably changed and grown since you first negotiated contracts with your suppliers. If you’ve worked with the same supplier for several years and always pay your invoices on time, you’ll be in a good position to renegotiate for more favourable terms.

Time is money!

Technology helps streamline your processes so you spend less time on admin and have more time to focus on other areas of your business.

• A good accounting software, like Xero, helps you stay on top of the bookkeeping so you always have accurate financial information.
• Time tracking software makes it easy to keep detailed records of work hours, and will automatically calculate hours for payroll and invoicing clients.
• Managing payroll can be tough! A payroll software can make sure your team is paid accurately, keep HR records like sick and holiday leave, and ensure you’re meeting compliance requirements.
• A pricing software, like Builda Price, helps you quickly and accurately quote for jobs and then track projects so you can compare actual costs in real time.
• If you’re on site all day, automate emails so you can follow up enquiries quickly. Set up an email to send to new prospective clients that showcases your previous builds and includes testimonials.

Get smarter with marketing

You know you’re not getting value for money for your marketing spend if the cost is high and the excuses are flowing!

• Know where your leads are coming from. Always ask how people found you and keep doing more of the same.
• Stop paying for leads and Google Ads if they aren’t good quality or are low volume for the monthly expense. Get better value by promoting your business through local networks, community groups and social media.
• Weigh up the value you’re getting from your monthly marketing activities. Add one marketing strategy every three months so you can assess the results. Drop the services that don’t work and replace with new options.
• If you are spending $1000’s every month on advertising plus coaching, SEO and CRM, you’re probably doubling up. Get a second opinion.
• The time and effort you put into networking and fostering good business relationships can really pay dividends.

The time and attention needed to reduce your overheads can seem overwhelming. Start with easy decisions, like cancelling subscriptions you don’t use anymore, and constantly review your finances. Every change you make will really add up over the long term and make your business more profitable.