The seventh way to grow your business is to reduce your overheads. These are the fixed costs in your business that don’t change much as your sales increase, e.g. phone, power, rent, interest, etc.
How often do you review your overheads? You should do this at least annually. Simply go through each expense line in your annual financial statements or Xero reports.
It’s also a good idea to review your regular automatic payments and direct debits from your business banking software. Are you paying for anything you don’t need or use?
Most business owners are careful about what they spend, however it pays to make the annual expense review a normal event. Here are some items you may want to zero in on:
1. Phone and power contracts
Are other suppliers offering better deals?
2. Bank interest
Are you paying the lowest rate possible?
3. Subscriptions for cloud-based software
These monthly costs may start small but creep up over time; adopt a use it or lose it philosophy.
4. Computer support contracts
Does your IT support contract need a review and reset now most software is in the cloud?
Are you getting an ROI (leads) from your advertising? Maybe your traditional advertising spend needs to change.
In addition to focusing on the above expenses, also make sure systems are in place to ensure you maximise prompt payment discounts.
While on the subject of overheads, let’s talk about accounting fees! If you believe your accountant is a cost, you should minimise that cost. On the other hand, if you consider your accounting fees are an investment, then maybe you need to invest more to grow or improve your business.
Talk to us about how we can help you get a plan in place. Having an annual plan and someone independent to provide you with ongoing accountability is the easiest and most supported way to achieve your goals.
“If you don’t know where you are going, every road will get you nowhere”. – Henry Kissinger