Every business, regardless of their size, is under pressure to be profitable. That said, there are plenty of opportunities open to a business to help them maximise their income while reducing unnecessary costs. However, some of these opportunities are more obvious than the others.
Some of the more obvious areas where businesses can streamline their operations include:
- Software
- Use of External Services / Contractors
- Management of Staff
- Operating Expenses
- Office Utilisation
In this article we are going to break down some of the ways a business can optimise their profitability without sacrificing the quality of the final product or service. It is very easy for a business to focus on how much money they are bringing in but it is equally important for a business to continually review overheads and expenditures within the business. By doing this you can ensure that there are no unnecessary expenditures eating into your companies profits.
Software
Software is well known to be a significant expenditure for many businesses. However, it can be easy to fall into a state of complacency when it comes to software. With that in mind it is always beneficial to periodically reassess the type and style of software you use. Some of the key questions you should ask yourself include:
- How much do I use this software?
- Is this the best software for the purpose I am using it for?
- Are there better alternative software solutions?
- Are there free versions of software which can perform the functions I need?
Software can also offer other advantages such as online and cloud storage, therefore allowing you to reduce traditional office costs such as storage and filing cabinets etc.
External Services/Contractors
Admit it, we have all taken on a job at work which might be a bit out of our comfort or skill zone but it doesn't always make sense to hire a new member of staff to fill this requirement. This is where contractors and coworking relationships really come into their own. However outsourcing or utilising external contractors can be expensive.
If you find yourself in a situation where you are regularly accessing external services and contractors it is time to consider some alternatives. For example:
- Would it make more sense to train up an existing member of staff? It is important to note that if you are considering training up another member of staff you will need to account for their time and reduced productivity while training.
- Could you establish a mutual coworking agreement with another company in a similar industry to share work between each other?
- Could you establish a ‘monthly retainer’ with a contractor for a reduced rate?
Management of Staff
Staff are a major expenditure for all businesses but it is also an area we continually overlook when we are assessing a company's overall productivity. One of the biggest sins business owners do is failing to track employee utilisation. Key questions all managers should ask themselves about their staff include:
- Are you fully utilising your staff and their skills?
- Do you have the right people working on the most appropriate tasks?
- How productive are your employees?
- Is everyone pulling their weight?
- Do you currently outsource some tasks? If this is on a regular basis would it make more financial sense to hire someone as staff?
- Could you capitalise on internship and graduate schemes for the office or project ‘grunt work’?
- Does your industry have ‘busy’ and ‘quiet’ periods? If so, would your company benefit from hiring zero hour, relief, seasonal or part time staff?
Operating Expenses
As with any office there are always general operating expenses which need to be considered. These include:
- Printers
- Scanners
- Photocopiers
- Kitchen facilities
- Storage and Furniture
- Utilities
- Internet and phone lines
- Software
For many small business owners the mere thought of the costs and hassle associated with setting up an office can put them off.
Office Utilisation
Many companies with an office will have spare or ‘extra’ office space which commonly becomes a dumping ground. However these spaces can be put to much better use. There are 2 key ways an office can access the full potential of their office space, these are:
- Restructuring the office so that spare space is more accessible. For example:
- Creating break out work spaces and meeting areas
- Clearly identifying storage and desk/working space
- Identify social spaces which staff can utilise during tea/coffee and lunch breaks
- Rent out spare office space
Renting out spare office space offers a company a wide range of benefits. Put simply, a company has to pay for their whole office space whether they are actively using it or not. With that in mind a company needs to assess whether they need this office space and if not would they be willing to rent this space out to another company or contractor. By renting out spare desk space, businesses can recoup costs of running their office for an aea they already have to pay for. This additional source of income, although it may be small, can add up over time.
In Summary
Owning and running an office is expensive but there are a range of solutions to help businesses ensure they make the most of their office space while streamlining and reducing overhead costs. In these turbulent economic times businesses must look in depth at how they work as well as where and in some cases who with. So whether you are addressing how you use your office space and creating different working environments for your staff or renting out that extra space for another source of income making the most of your office space is just common sense!
