Reducing small business overhead
Overhead normally consists of debt that a business owes to creditors and other individuals. Your overhead is basically everything that it takes to run your business. You need to pay your employees, you need to pay your insurance, you need to pay your suppliers, etc. All of your accounts payable are generally considered your overhead expenses. To save money, small business owners can find ways to decrease their small business overhead, here are some tips:
Tip # 1 - Reduce Inventory
Take a look how you can reduce your inventory. For example, if you sell bookmarks, consider printing them together instead of separately. This will save you money on printing costs and you have the ability to print them when your customers demand them. Review your inventory often to determine which items need to be phased out and which items are the hot-sellers. Even though you may think it's wise to carry a lot of your hot-selling item, be careful. The market can change at anytime and before you know it, you are left with a warehouse full of dusty products that used to be hot-sellers. To phase out some of the older inventory, combine them into packages with other items. This is a great way to still get some of your investment out of them and you can promote some of your other products. When you reduce the size and cost of your inventory, you free up your cash flow so you can use it on other things like purchasing of new equipment.
Tip # 2 - Partnership and Negotiations
Negotiations can also reduce your overhead expenses because you are trading services with other companies. Instead of paying your vendors cash, re-pay them by trading services. For example, a fast-food restaurant can trade their food for auto repair services. This way both parties get what they want, you just need to make sure the trade is fair.
Tip # 3 - Price Check
Tip # 4 - Shipping Expenses
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