There are times during the life of any business where overheads need to be reviewed.
Unfortunately, those times often push business owners to make rash decisions which, ultimately, result in lower levels of efficiency and profitability.
You read that right – cutting your overheads can lower your profitability if you get it wrong.
So, with that in mind, here are a few tried-and-tested ways to find the overheads your business could probably do without.
Speak to your accounting team (or accountant)
If there’s one department in your business that’s going to provide an invaluable insight into your overheads, it’s your accounting team. Or, if you don’t have an internal team – your accountant.
This insight shouldn’t simply come in the form of monthly reports, either; the people who spend the most time on your business’s figures will almost certainly have their own view on overheads.
They’ll be aware of expenditure that is questionable, and, while they probably should be proactive to highlight these instances, a one-to-one chat might be needed to bring it out.
Have a scout around the office
When was the last time you had a look around your office at the equipment, systems and paraphernalia that surrounds you?
How much of it are you using? Do you have contracts with paper suppliers that are resulting in piles of the stuff you’re no longer using? Is there an ageing server in the corner of the room that has a hefty annual support fee but only stores a few redundant files?
We get used to our working environments, but that doesn’t mean they’re as financially efficient as they should be.
Switch to the cloud
The software you use each day might be costing you more than necessary – particularly if it doesn’t run from the cloud.
Some on-premise systems still have a place in certain businesses and therefore shouldn’t be discarded without reviewing options with the vendor, but if a cloud alternative exists, it could significantly reduce your IT overheads.
Go as paperless as you can
The ‘paperless office’ is something of a pipe dream, but you can go as paper-free as possible.
Every little helps when it comes to cutting unnecessary overheads, which is why reducing your reliance on paper as far as possible is so important.
For instance, are you still printing out customer documentation for bookings? Why not revert to email communication instead? Equally, if the accounts arm of your business still relies on printed invoices and receipts, look for a digital alternative.
If you need convincing on this step, spend some time adding up your annual spend on paper and receipt rolls; it might surprise you.
Turn to automation
There may be a number of staff duties and processes that can be automated – particularly if you’re running with a reduced staff base.
Seek out the tasks people undertake that are repetitive and which can instead be automated by software. Typical examples include accounting tasks, booking processing and other administerial duties.
Speak to staff to find out which tasks they’d love to have taken off their hands so they can invest their time in duties that are more focused on increasing your profitability.
Final thought
This isn’t about needlessly cancelling supplier contracts you’ll need again one day or cutting ties with consultants simply because the invoice suddenly seems like too much of a burden.
Reducing overheads is a big commitment to make as a business, therefore you need to be sure any cuts won’t impact negatively on your operation or profitability.
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DockMaster Software is an industry leading management system for marinas, boatyards, and boat dealerships. DockMaster includes Unit Sales, Prospecting and F&I with fully integrated financial management and numerous integrations with CRM applications, dealer websites and text/messaging services. The Service module includes estimating, labor tracking, and complete parts management with ordering/receiving, subcontractor fulfillment and invoicing. DockMaster Mobile allows technicians to clock on/off jobs from any mobile device. Visual Marina™ management includes storage & billing, occupancy tracking, reservations and dry stack management, including integrations to leading consumer applications for boat rentals, online reservations, concierge/launch scheduling and our new Fuel Integration with FuelCloud. DockMaster also includes Point of Sale, Order Entry with eCommerce and a complete accounting system. Learn more at www.DockMaster.com and follow DockMaster on Twitter, Instagram, Facebook, and LinkedIn. Or email info@dockmaster.com
