High overhead costs are dangerous for any business under most economic conditions, but all the more troublesome during tough economic times. Basically, overhead includes all of the expenses not directly related to making your product or delivering your service, and even in the smallest businesses, it tends to grow, slowly and unnoticed, until suddenly your costs seem out of control.
Bloated overhead is a threat to your ability to compete, and perhaps to your very survival. On the flip side, however, a lean operation becomes one of your best competitive weapons.
Here are places your business can look for significant savings:
• Cut your energy costs: Energy costs are soaring. Energy Star (www.energystar.gov), a government-backed program that helps businesses and consumers cut energy costs, is a terrific source of free help. The Web site has detailed advice on how small businesses can cut energy costs and calculate savings.
• Save on shipping: The key to saving money on shipping is often comparing rates among different carries for the types of items you send, and the destinations you ship to. RedRoller.com is a free online shipping center that lets you quickly compare real-time rates and delivery/pickup options from top carriers. You can manage the shipping process directly from the site.
• Trim travel costs: Planning ahead is still the best way to save on airfare – the longer you wait to book your ticket, the higher the price goes. Use travel Web sites such as Kayak.com, Orbitz.com and Travelocity.com to compare rates. But don’t stop with a single comparison. Rates literally change minute to minute, and it’s possible to save hundreds of dollars simply by checking different Web sites.
• Use more temps: Salaries and benefits for full time workers are a huge expense. If possible, consider temps to fill your needs, making it easier to take your foot off the gas if you need to. A quick place to locate a temp agency is the American Staffing Association Web site at www.americanstaffing.net.
• Get better control of your inventory: The costs of carrying excessive inventory, or the wrong inventory, can be crippling. Specialized inventory control software for small business can help. Fishbowl Inventory (www.fishbowlinventory.com) is helpful software that integrates with QuickBooks. ·
Daniel Kehrer can be reached at editor@business.com.
