Certain important elements are necessary to keep a business running. One of such elements is the overhead expenses that are incurred on the company’s income statement except for direct labour, materials and expenses.

Although businesses generally can’t do without overhead expenses, entrepreneurs are constantly looking for ways to keep these expenses at bay because they often take a large chunk from the company’s overall income.

However, if it’s not possible to avoid overhead expenses altogether because obviously businesses need overhead to run smoothly, it’s possible to reduce the expenses to a reasonable level that won’t affect business.

Let’s take a look at the smartest ways you can reduce your business overhead expenses.

1.       Do flat fee recruitment

One of the biggest issues most human resources departments face a lot is recruiting new staff. Apart from trying to get individuals with the appropriate skill sets to fill available roles, staff recruitment is usually very expensive for many companies.

However, flat fee recruitment has been identified as one of the easiest and cheapest staff recruitment strategies available today. Typically this method allows you to fill as many roles per vacancy as possible, and helps you to hire the best candidate for one fixed fee.

To get started with flat fee recruitment advertising, send over your details to a certified recruitment agency. Once they receive it, they’d design the advert and then post it to reputable job boards, screen and filter all applications for you and then hand over the best CVs to you for selection.

2.       Use partitioned offices

Using partitioned offices is a great way to reduce overhead costs. It allows you to create separate office spaces for employees within a limited space. This way, you can avoid paying for larger compartments and still get your job done conveniently.

Apart from this, partitions offer a number of other benefits to employees. It provides more privacy, allowing individual employees to gain more concentration. It also provides a flexible system of division for each department for effective coordination of their activities.

However, you should be careful not to overcrowd the entire office space with more individuals than necessary. Also, you should ensure that spaces provided by each partition are large enough for leg space.

3.       Outsource your work

Outsourcing is common practice among large corporate and even small businesses. It’s a smart method companies use to reduce overhead expenses. It involves entrusting the non-core processes of their business functions to external vendors with key competencies.

It should be noted that the main consideration for most businesses that outsource is the cost benefit involved. In addition, outsourcing guarantees faster and better services because it allows you to focus on key areas of business. Therefore, it increases your business’s overall efficiency.

To determine whether certain aspects of your business should be outsourced or not, you must answer few questions:

•       How stable is the vendor?
•       What vendor performance targets will you set at the start?
•       How will you measure the vendor’s success?
•       Have you brought your employees on board with outsourcing?
•       How will you transfer your business’s experience and knowledge to the vendor?

Don’t outsource until you’ve answered these questions satisfactorily.

4.       Invest in technology

Technology allows you to achieve more in less time. It brings out the best in employees by complementing their efforts and making them more productive. More importantly, it helps companies reduce overhead expenses like cost of buying papers, employee overtime, and lower cost of facilities.

For example, you could leverage mobile apps and social media for customer service, create an effective database instead of piling large files in cabinets, and automate your processes with software. Technology is a huge investment on its own but it saves you cost on the long run. That’s why smart companies can’t do without it.

Lastly, these aren’t the only way to reduce overhead expenses but if you do flat fee recruitment, use partitioned offices, outsource your work and invest in technology as explained above, you’d see your company income shooting through the roof and opening up new opportunities that’d allow you scale up in the industry.