Your bottom line is one of the most important numbers in your business. You’re constantly striving to improve it, because if you’re not driving your revenue up, and if you’re not growing, you’re dying.
That being said, one of the biggest factors that can help improve your bottom line is controlling your business costs. Overheads: They’re often the biggest outgoing of any company. Anything from staff costs, expenses, purchases, inventory – it all adds up.
Without constant vigilance, you could find yourself with bloated overheads which can be potentially damaging to the overall health of your business. Only with regular review and control can you keep your company in shape so that it continues to perform well under any economic climate.
Here are our top suggestions for reducing your overheads and controlling your business costs.
Cut all unnecessary costs
If you don’t review your business costs often, you’ll probably be surprised at how many outgoings you actually have when you take a look at your finances. There might be subscriptions you no longer use, supplies you no longer need or even services you no longer take advantage of.
Taking a look at all these costs and asking yourself if you genuinely still need them can go a long way in beginning to reduce your regular outgoings. Even changing from a paper-based invoicing system to an email based on can be the start of your costs going down, because you’d be immediately saving heaps on postage, printing and mailing costs.
Hire the right people
Simply put, bad hires are expensive. Hiring the wrong person can have a negative impact on your team, both on their productivity and even their morale. In order to combat this, you should take a look at how your team is operating on a regular basis.
This doesn’t just mean your core contracted team. Often hiring freelance workers can be a cost-effective way of building your team. There are a lot of business functions that don’t necessarily have to be in-house, such as your marketing or accounting team, and these can often be charged around a project or an hourly rate, and you’ll probably find yourself saving money by not having to pay expenses associated with hiring staff to work on site.
Get on the cloud
We’re no stranger to the cloud. We always advocate businesses using Xero for their finances, as it’s a fantastic tool that put you back in control of your numbers and helps you improve upon, or even turnaround the fortunes of your company as a whole.
But there’s more to the cloud than just Xero and financial apps. Technology is constantly changing, and it’s improving in such a way that gives you and your employees more freedom.
Cloud based servers for instance can be a massive improvement and cost reduction over physical servers, and they also would allow you and your team more creative freedom. Not only that, as cloud-based technology reduces your overheads, you’ll likely find yourself also being more efficient.
Review, and review again
The number one way you can control your business costs is to lead by example. Make reviewing and controlling your costs a core business task. If you want your employees to be in control of their expenses, you have to lead and show them by example.
Be smart about the choices you make. Review your outgoings constantly. If you’re using Xero, it’s a simple click of a button to look at your expenses, so you can task yourself with doing this on at least a monthly basis.
Need more support?
If you want additional support with your business, from strategic planning all the way to setting you up on Xero, then you can head to our website for more information.
Don’t let business costs be something overwhelming that brings down your business. Get the right support in place to keep your business a reality