It’s a disheartening statistic to say the least, but the Bureau of Labor Statistic (BLS) reports that over half of all small businesses are forced to close their doors after just five years. While a small business can fail for dozens of reasons, high overhead expenses is often a contributing factor. Thankfully, though, there are ways to lower your small business’s overhead expenses and, therefore, increase its chance of long-term success.
Use Paperless Documents
How much money does your small business spend on paper documents. A report published by The Paperless Project suggests U.S. businesses spend over $120 billion on paper documents and forms each year. Regardless of what type of small business you operate, you’ll probably use paper documents and forms in your operations. Depending on the nature of these documents and forms, however, you may be able to switch to a digital format instead. Tax forms and pay stubs, for example, can often be sent to employees digitally, eliminating the need for paper.
Compare Rental or Leasing Prices
Not surprisingly, one of the biggest overhead expenses encountered by small business owners is renting or leasing a store or building. While you can’t eliminate this overhead expense, you can often lower it by shopping around. Explore several prospective locations for your small business, and when you contact the owner or landlord, inquire about the rental or leasing cost. With a little work, you may discover a better location for your small business that costs less than your current location.
Choose Highly Effective Advertising Tactics
Advertising is also considered an overhead expense, so you should choose your advertising tactics carefully. Avoid using mass-volume advertising tactics that expose your small business to a large, generalized audience. Instead, choose targeted advertised tactics that allow you to reach your small business’s key demographic of potential customers. Not only will you spend less money on targeted advertising; you’ll generate more revenue from it.
Cancel Nonessential Services
Go through your small business’s bank statements and credit card statements to identify any nonessential services. Maybe you’re paying for a landline that you rarely use, or perhaps you have two internet services when you only need one. Either way, you should consider canceling nonessential services to save money on your small business’s overhead expenses.
Have anything else that you’d like to add? Let us know in the comments section below!