As a business owner, you have to do everything you can to reduce operating costs. It’s a simple matter of profit and loss: You want to bring in as much revenue as possible and keep your expenses to a minimum.

Make sure you monitor your company’s financials, from the bottom line to detail expenses. One of the things you should be aware of is your operating expenses. Operating expenses are not the same as fixed expenses, in that they are not the same from month to month. Operating expenses, by definition, need to be adjusted based on the business’s activity. If you’re selling more, you need to pay more for things such as shipping, storage and other associated expenses. If you’re not selling as much, you can cut down on some operating costs.

Reduce your office space

One way to do this is to reduce your office space. You don’t have to move completely out of your current office, but there are things you can do to change the way your office space works. Many businesses are now offering work from home options, on rotation, with hot desks available. Productivity remains as productive, employees report higher job satisfactions, and reduce carbon footprints. Downsizing has reduced operating costs tremendously.

Optimise office supplies

Most offices struggle to keep their operating costs low. An office-supply budget of $1,000 a month for a medium-size business is considered “low,” and most businesses spend double that. While it’s important for businesses to buy the supplies and equipment they need to run their business, it’s also important to keep their operating costs under control. As your business grows, so too will your office-supply needs, so it’s important to learn the best ways to stretch your office-supply budget now.

Look for more cost efficient services

Is there a co-working space available within the vicinity that offers similar solutions at affordable rates? What are the ways to use office supplies efficiently? Is there a refill available? Can we invest in premium quality that will last longer? Can we extend the warranty? Do we have any recycle solutions in place? Who else might need them after use? Who can we speak to gain more insights to more cost efficient solutions?

Make a budget

Working on your business budget will be your roadmap for spending the money you have to operate your business, and for determining when you’ve reached your limit for growth (if ever). It’s not a determination of your business’ value, but it will determine whether your business can grow and survive. Where do you spend the most on operating expenses? How many tools are you paying monthly subscriptions? Is there an alternative for one off payment for some services? How frequently do you monitor your budget?

Automating Tasks

It is important to keep your business as automated as possible. This will streamline your work flow and allow you to complete projects faster and more efficiently. It also saves you time, which means you can pursue more opportunities and charge higher rates. Use workflow chart to determine the process flows, found out overlapping tasks, missing tasks, tasks that need automation, find useful automation tools, speak to teams to explore ideas.

Outsourcing to a Virtual Assistant

Virtual assistants are becoming a necessity for small businesses. They are capable of doing a wide range of services, from web design to writing press releases, administrative tasks, customer service or even for creative work. When you consider the benefits of hiring a virtual assistant, it’s hard to find reasons not to go this route.

Evaluating the effectiveness of current expense reporting systems

One of the most important yet often overlooked aspects of managing a company’s bottom line is the process of expense reporting. With the proper accounting software, it’s possible to keep track of employee spending and even make recommendations to reduce operating costs. If you have employees who need help with their expense reporting, here are a few tips to help you get started. What accounting software are you using? What accounting structure is set up to capture expense reporting? How often is the data maintained? How often is the report is monitored?

Reduce utility bills

Knowing the ins and outs of your utility providers is a must, since every business is unique in its energy usage. In addition to reviewing what your business uses and why, it is important to shop around for the best rates. Are you paying for premium cable channels? Many companies are now offering lower cost basic cable packages. Don’t hesitate to ask for a lower rate on services such as telephone and internet. In some cases, the provider will lower your bill if you threaten to go to another company.

Use technology to reduce costs

There are many ways to reduce costs in your business, and technology is one of the most effective. From making sure you’re using the latest software, to upgrading equipment to the most recent models, to developing more efficient processes, there are steps you can take to reduce your business’s operating costs. One option is to consider outsourcing some of your business processes. This is a great way to reduce overhead costs, since you don’t have to pay for equipment and salaries, and also allows you to focus on your core business.

Outsource your accounting tasks

Certain tasks are hard to complete by yourself. When you start a business you want to keep overhead costs low so that you can focus on doing what you do well. You need to stay focused on your core business and not get distracted by administrative tasks like bookkeeping, accounts payable, payroll, and receivables. It will be difficult for you to find time to complete these tasks, especially if you have a physically demanding main business.

We are outsource full accounting services, from bookkeeping, accounting and compliance requirements. Want to find out more? Talk to us for free discovery consultation.