Expenses from business operations are among the highest contributors to overhead in any business. According to the United States Census Bureau, the estimated annual operating expense of a grocery store is around $144,000 while those in the accommodation and food service business is around $559,700. While these are big numbers, the good thing is that a lot of these expenses can come from repetitive minor tasks. In other words, minor cost improvements in business operations can have a cascading effect which can save your business thousands of dollars each year.
Reduce Paper Consumption
Paper consumption is one of the biggest reasons why businesses incur massive operational expenses. Contrary to popular opinion, consumption of paper is in fact on the rise. According to one study, Americans consume as much as 500 lbs of paper per capita each year. Companies in the United States spend $120 billion annually on printed documents and forms. A major reason for this is essentially an improper execution of paperless strategies. Simply moving towards digital alternatives should help companies save several thousands of dollars each year in operational expenses.
Move Your Contracts And Invoices To The Cloud
Businesses routinely keep physical and digital copies of their contracts and past invoices for the sake of auditing and future exigencies. This is an operational expense that only increases with every passing year. Aside from the costs of storing these documents physically and digitally, such archives are also at danger of being permanently destroyed in case of fire or burglary. One way to insure the safety of these documents and also to reduce the operational costs is to migrate these documents to the cloud. Besides centralizing your document management, such contract management tools also help with better data protection and seamless collaboration. In terms of operational expenses, businesses can bring down the costs from several thousand dollars each month to just a few hundred dollars.
Doing away with a physical office
Does your business really need that swanky office in the CBD? Unless your business really demands it, it is a good idea to encourage telecommuting and BYOD at the workplace. Letting your staff work from home is a good way to reduce commuting time and also save on office space. This makes your employees more productive than they are at an office workspace. You could still schedule weekly face-to-face meetings with your employees by renting temporary office space at one of the many coworking spaces in your city.
But sometimes, one reason to lease an office in the expensive areas of the city is to establish your credibility among clients. For this purpose, you could look into a virtual office address service in your city. Such services let you advertise a commercial office address in the expensive areas of the city for a small monthly fee. Not just that, you can choose to have all packages delivered to this address get automatically rerouted to your actual business address.
Doing away with a hard copy of a document or saving electricity costs by asking your employees to telecommute might seem like a rather cheap fix to a complex problem. But, in reality, it is not. Paper, electricity and real estate are some of the biggest contributors to operational expense and reducing these go a long way in bringing down operational overhead for your business.