10 Smart and Practical Ways to Cut Your Overhead Costs.


Do you need to cut your overhead expenses? Small-sized entrepreneurs share their top ways to cut costs while ensuring customer and employee satisfaction.

Small businesses know it’s difficult to cut expenses without sacrificing external or internal quality. If you’re trying to cut your overhead costs first, you must begin by making time to go through every expense and determine precisely what you’re spending. Once you’ve done that, it’s time to determine what’s essential to cut back on, what is a possibility of reducing, and what needs to be eliminated.

“Print out a profit and loss statement that spans the past 12 months,” explained Claudio Conte, CPA, and co-founder of Bullstrap. “Go line by line … [and] look into each expense to determine where there are possible areas of waste or excess. Applying this practice quarterly or bi-annually allows for a higher percentage of funds to be devoted towards income generating areas, and cutting funds going towards wasteful areas.”

Set a regular shift for remote work

Many companies explored large-scale remote work for the first time during COVID-19. Deciding to switch to telecommuting in positions that make sense permanently could make a big difference to the cost of your overheads.

“Scrutinize the company and employee tasks, and allow those who can telecommute to work from home,” said Sahin Boydas, the founder and CEO of “Allowing some or all employees to telecommute will reduce the amount of money spent on office coffee, bring down printing costs and dramatically reduce the amount of energy consumed overall by the business.”

Check your software subscriptions.

Many business owners use cloud-based applications to run their businesses. But the monthly costs for these tools can add quickly, which is why checking your recurring subscriptions is recommended.

“While $10 a month might seem really affordable at first, once you set up subscriptions for project management, accounting, photo editing, social media management, proposals, scheduling, etc., you’ve racked up a pretty hefty monthly bill,” said Nerissa Zhang, the CEO of The Bright App. “Opt for the free version of these online tools when you can and [find] one subscription that combines the functionality of several different services into one.”

Reduce your variable costs

In today’s remote-work environment, variable expenses like office equipment, business travel, and meals can often be reduced or cut. Raquel T. Morris, the chief operating officer of FinDec, is adamant about changing these expenses in your monthly budget when required.

“By reviewing each expense item, I can determine what liabilities must be met versus what can be temporarily … scaled down,” Morris said. Morris. “Although we all love snacks in the company pantry, cutting the budget by 25% makes a huge difference. Reducing travel and using Zoom … is a great way to save money and keep employees and clients safe. We have [also] found better deals online by simply spot-checking the cost of office supplies.”

Automate administrative tasks

Instead of employing either a full or part-time administrative assistant to take the “back office” work off your hands, consider automating tasks like billing and appointment scheduling, client follow-up, and others that require manual effort.

“Those very generic and mostly simple tasks can be automated with minimal effort,” said Alex Kehoe, co-founder and director of operations at Caveni SEO. “Even complex internal data collection can be fully automated in the same way and used to augment other automation tools.”

Further, you can cut expenses by using the automated chat system as the initial point of contact for customer questions.

“Live chat systems can help multiple customers at once, and that’s something an employee can’t necessarily do,” said Sturgeon Christie, CEO of Second Skin Audio. “You can be incredibly responsive … [, and] offer a better overall customer service experience, [which] helps drive customer loyalty. The one-time investment … can save your business money, time, and stress.”

Discuss with vendors

Suppliers and vendors are usually willing to assist their clients with small businesses and give the cost of the current economic downturn.

“Figure out if your suppliers can work on a net-term basis of 60 to 90 days or [offer] flexible monthly payment plans,” said Richard Lin, founder, and CEO of Thryve. “That way, you reduce risk in the business and stay on top of cash flows.”

Samantha Anderson, co-founder and president of Origin 63, suggested reaching for your tech and service providers to find out whether they’re willing to reduce your subscription prices.

“Software companies may extend up to a 10% discount right now, which means a 10% cost reduction,” Anderson said.

Make investments in culture to decrease turnover.

You may have already cut down on hiring new employees to save money; however, it’s equally important to keep the ones you already have. The cost of employee turnover from voluntary turnover is U.S. businesses $1 trillion every year, making it worthwhile to invest in cultural initiatives to keep employees around.

“Do what you can to raise morale and give staff members a reason to stay … even if you have to invest more elsewhere,” Jason VanDevere, CEO and co-owner of Goal Crazy Planners. “I suggest more company outings, refresher courses, and getting employees more directly involved in company goals to give them a greater sense of purpose.”

Evaluate your marketing strategy

As a company grows as it expands, so does the marketing budget. However, before you follow your current approach, review every channel and campaign to assess the return on investment.

“Review your marketing mix [and] compare how much you are spending and gaining from each channel,” said Irina Georgieva, co-founder, and CEO of Enterprise League. “If, for example, you are investing a lot in PR … but you don’t see a significant increase in your website traffic, you are likely targeting the wrong marketing channel.”

Profit from the gig economy

If your company has made the difficult decision to reduce or eliminate full-time workers, but you require help with your work, skilled freelancers and independent contractors can help quickly fill in the gaps.

“When you hire a freelancer, you do not need to pay for benefits… are willing to work for a fraction of a cost compared to full-time employees,” said Drew Cheneler, founder of SimpleMoneyLyfe. “Shop around and … hire freelancers who put their money where their mouth is. Make sure your freelancer has a portfolio of previous work for you to review, a rolodex of customer testimonies, and a flexible schedule.”

Find an accountant

Whatever confidence you feel about your business’s budget, it’s always good to have a second third party’s perspective. A professional accountant can provide the most objective assessment of your budget and could assist you in saving even more money on overhead expenses.

Brian Santiago

How to make the most of your business plan.

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