June 02 2021
Our Leeds Roseville Road team observed an increase in companies reducing overheads to avoid the bite of the still turbulent economy. A survey by McKinsey & Company found companies have managed to cut their overhead costs by an overwhelming 15 to 30 per cent* over the past few years, with savings ranging between £625,000 and £62 million a year*.
To help other local businesses looking to streamline their outgoings, here are some guidelines where costs can be reduced resulting in significant savings:
Manage stock levels effectively and efficiently
Buying supplies in bulk is considered a cheaper way of purchasing office supplies and equipment but this can be a false economy. Ordering supplies based on actual requirements can help reduce overheads by avoiding wastage. Companies should look into spreading the cost of stock over a longer period of time, while being cautious of high interest payments. For those stuck with surplus supplies, why not give reduced rate offers to employees or the public. Alternativly buy in bulk and source a cheap storage solution for your excess stock, taking advantage of bulk buying discounts and using your office and storage space efficently.
Outsource your storage solution and cut back on rent
Companies that store stock on site not only pay higher rents for bigger premises but also higher utility bills. Storing excess Storing stock, equipment and documents on an external storage facility can result in significant savings on the rent and rates. Ready Steady Store provides secure self storage to local business from as little as £5 per month.
Renegotiate contracts with existing suppliers to reduce costs
If the company has long term contracts with suppliers for raw materials or services, try and renegotiate a new cost effective deal with them, especially if the company relies on those suppliers for large amounts of raw materials, such as metals, timber, or paper. You may fins overseas companies can provide the same product with same quality standards at a cheaper price.
Motivate staff to increase productivity
Staff wages are one of the main overheads and a cost which is unavoidable at many companies. Avoid taking on new staff by motivating the staff you have to be more productive. If your business is seasonal or experiences rushes on certain days, hire part time staff which will focuses resources during busy periods.
Use efficient technology and procedures
Using up to date technologies throughout the company can help save money. Investigate ways in which the company can do things faster at a reduced cost. Make sure your practices and procedures are up to date and look for streamlined processes. Get staff to send emails rather than making unnecessary calls and introduce calls through Skype as it will help reduce telephone costs.
Share office space with other companies
If you are a small company, sharing an office with another small company will enable you to make significant financial savings as you have will shared costs such as utility bills, insurance and rent. If you have unwanted office space, try renting it to generate some additional income.
Go eco-friendly and reduce you overheads
Focus on developing eco-friendly processes within the office to reduce overheads by closing windows when the heating is on; not boiling fell kettles for one cup of tea; recycle scrap paper for printing non-important documents for internal use; and avoid printing out unwanted emails and documents.
Trade services in exchange for other services
Consider offering your services in exchange for another service or trade (for example, printing companies can offer their services to local bakeries in exchange for a free lunch). Even offering spare meeting rooms to other companies can generate additional revenues. These measures can help both parties to make huge savings.
Ready Steady Store – Self Storage Leeds Roseville Road