What do busy business owners and brilliant entrepreneurs have in common?
There’s ONE thing they all love to gloss over…
The nitty-gritty of their books.
Who wants to spend hours pouring over every single detail of a financial statement?
Okay, sure, some of us enjoy that kinda work. (After all, I’m in this business for a reason!)
For most of my clients, the idea of cozying up to an expense sheet over their morning coffee is the stuff of nightmares. It’s just not the way their brains work, and worse yet, no one’s taught them what to look for. But it’s an important business function.
Here’s the thing, though…
Most of your unnecessary expenses are buried in those lines…
And while you may not notice the finer details, you’ll certainly notice your bottom line.
Fortunately, I’m willing to give you a little cheat sheet.
But first…
What Are Operating Expenses?
Operating expenses (OPEX) are the costs of running a business on a day-to-day basis, such as maintenance and administration. These are extra expenses that aren’t directly associated with your product or service.
Some examples of operating expenses include:
- Payroll for staff
- Insurance
- License fees
- Rent
- Research
- Marketing (including for social channels like Facebook)
- Accounting fees
- Building maintenance and repairs
- Office supplies
- Utilities
- Attorney fees
- Property taxes on real estate
- Vehicle expenses
- Travel expenses
- Overhead costs
Ways to Reduce Operating Expenses and Improve Efficiency
Embrace Remote Work
How much are you spending on rent?
The WFH craze isn’t just a 2020 fad anymore.
Working remotely is here to stay… And it’s got many people questioning the benefit of paying hefty monthly rents for unused office space. Even keeping office supplies stocked impacts business expenses.
Now, even if you don’t want to say goodbye to office culture in its entirety. But there are certain things you can do to reduce your monthly operational costs.
Consider co-working spaces, flex spaces, or alternating Work From Home schedules to make sure you’re spending every penny wisely.
Reevaluate Your Staff
No, I’m not suggesting you cut costs by cleaning house. However, I’ve seen way too many companies add random positions to their payroll, without thinking through the need.
When reviewing your headcount, consider both your current situation and your future expectations.
If you’re on the fence about a new role, try outsourcing the work and see how it feels before you commit to a full-time employee.
You just might find you don’t need everyone in-house. Or maybe consider a job-sharing model… you could find it increases productivity, and therefore profit, for the business.
Simply put, don’t be afraid to think creatively about why and how you staff.
Comb Through the Benefits
Next, think through those perks.
What matters more to your staff, unlimited PTO or premium health insurance plans?
First, figure out how much room you’ve got in your budget for offering an attractive benefits package, and then get a pulse on what your employees want most.
The good news is that in today’s day and age, there are plenty of trusted solutions for retaining top talent through a variety of benefits… withOUT having to spend an arm and a leg.
Stop Taking the “Set It and Forget It” Approach to Insurance
Who else is guilty of hitting the “renew” button on their insurance plans once a year, like it’s a mandatory to-do item to check off the list?
If you’ve done this, you wouldn’t be the first.
But the reality is, insurance requirements change, as do the needs of your company. So make sure to do your due diligence in reviewing your plans. Otherwise, you could end up paying for things that haven’t applied to the business since 2017.
Avoid the Dues & Subscriptions Black Hole
You know that moment when you realize you’re spending hundreds of dollars a month on Hulu, Netflix, HBO Max, that skincare subscription box, Amazon Prime, and a Washington Post subscription?
Yeah, it’s a lot.
And your business is the same exact way — except often a hundred times worse!
This is why you MUST conduct annual audits, so you don’t get blindsided by throwing thousands of dollars down the drain on dues & subs you forgot you had. And if you pay for your employees’ subscriptions, check to see if there’s a more cost-friendly corporate option.
Now that wasn’t so bad, was it?
Once you know what to look for, it becomes way easier to optimize your operational expenses.
And shaving off those extra dollars here and there can be a world of difference for your bottom line.
Still not feeling jazzed up about the idea of combing through the lines? Don’t worry. Ask an expert for help today!
