Minimizing small business overhead is a perpetual problem. Make it a daily concern, and budget for your future costs now. After all, with revenues down and margins slim, you can lose your dream with two or three months of out of control overhead

Were overhead costs part of your small business dream? Were they part of your original plan? And, have you learned to manage overhead since?

Salaries lead the list of overhead costs that also include rent, utilities, postage, and office supplies. But, you also have to remember advertising, client entertainment, and transportation.

  • Leave it to a pro. Let a tax-expert do the bookkeeping. Charge the pro with minimizing the overheard costs – and reporting those that are tax-deductible.
  • Go paperless. Cloud computing allows you to write, share, file, store, and archive anything and everything you once printed.
  • Host a lawn sale. Inventory your equipment and toss anything that does not serve a measurable need. Electronics drain electricity; turn them off when not in use. Share printers, copiers, and monitors. And, invest in energy-efficient appliances and electronics. Get rid of everything else on craigslist.
  • Eliminate phones. Use Skype, Google+, computers, and cell phones to make and receive calls. If your business and its size permit, get rid of all phones and the communications systems supporting them.
  • Reduce on-site staff. Delegate work to telecommuters and virtual employees. Reconfigure the receptionist’s job to manage telecommuter traffic. In fact, only hire employees with multiple skills. Design jobs around multiple skills; it’s not the same as “multi-tasking” that is just a euphemism for juggling. For example, make sure a candidate is fully expert in all Office Applications. Accounting staff need to be able to work across all accounting functions.
  • Tighten the space. If you rent space, reconsider your needs and renegotiate your lease. Consider sharing a new space with other non-competing businesses. Think about sharing personnel and equipment. But, before you move, re-open your rental agreement with your landlord.
  • Rethink marketing. Radically reduce entertainment, travel, and advertising costs. Find alternative ways to attract and retain customers. Cut drinks out of luncheons. Advertise through web links and news releases. Drive prospects to your website. And, don’t place an ad where it hasn’t worked before.

Bring your staff, your family, and friends into this task. Employees are likely to spot nickel and dime savings, but those add up. More important, you need to let them know this is a problem with some priority. Let them share in purpose and accountability.


by Steven Schlagel