Success in business consists of many factors related to product quality, level of service, customer acquisition efficiency, etc. But there are also secondary factors that are not always given due attention. For example, articles on overhead and indirect costs may well hinder the development of the company, due to financial constraints, not allowing it to actively move forward. There are many ways to minimize them. The most common ones will be discussed below.
1. Audit of expenditure items
A routine revision of the channels through which the enterprise’s money flows monthly will allow, at a minimum, insurance against unnecessary expenses. The mistake of many managers is to accept the once established list of expenditure items as permanent and unconditional. At the same time, costs may vary, as well as the conditions of the enterprise. Some of the expenses become irrelevant over time, and some of them can simply be reoriented as part of the optimization.
2. Employee involvement
One leader, no matter how experienced and qualified, may not know all the intricacies of managing expenditure items. Especially when it comes to a large company. Involving employees of different levels and profiles in the process of optimizing expenses will allow us to look at the problem broader and thereby choose the most correct way to rationalize the financial activities of the enterprise.
3. Revision of third-party contracts
Long-term contracts are the most painful in terms of a gap. However, for example, rent as one of the most sensitive expense items in a small business may well be revised. Perhaps changing the site for the office will not only save a certain percentage, but also improve working conditions.
4. Technological optimization
Against the backdrop of dynamic changes in the field of new technologies, the replacement of office equipment may well justify itself. Having written off unnecessary and obsolete pieces of equipment, you can save on maintenance and repair costs, not to mention the functional advantages of installing more modern equipment.
5. Staff optimization
Another painful item of expenditure is employee salaries. It’s not worth keeping frankly ineffective cadres only out of respect for their former contribution. Thus, damage is caused to the company as a whole and to other employees in particular.
6. Revision of marketing strategy
Again, we are talking about technological updates, when inefficient means of promoting products are a thing of the past, leaving room for modern methods of communication with customers. For example, expensive paper advertising today does not play the same role as it did 5-10 years ago.
7. Digital upgrade
Another area affecting technology upgrades. The same rejection of paperwork and the introduction of digital communications not only reduces financial costs, but also increases the productivity of companies.
8. Appointment of the purchaser
The activities of modern companies are associated with a huge number of indirect costs for various kinds of acquisitions. One employee whose responsibility will be full control of procurement will be able to optimize spending by devoting all his time to finding the most profitable offers.
9. Lease of space
If the company owns vacant premises, it is advisable to lease them. An empty place does not bring profit, and a constant source of income will cover part of the same indirect costs.
ten.Alternative forms of workflow organization
Traditional approaches to the organization of labor activity are gradually being reviewed by specialists in the field of management. This, for example, may be about moving to work without an office at home. The concept of coworking is also noteworthy, when several interested parties rent a large space and organize a free zone for work and creativity in it. All this also minimizes costs, and sometimes provides more opportunities for professional growth.