Why do small businesses fail? More often than not, the reason has to do with cash flow, with over 80% of small businesses closing their doors within the first five years of operation due to poor money management skills.
This has become an unfortunate reality for several reasons: service businesses rarely have access to the cash they need to cover upfront costs like contractor certifications and work equipment, and the need for capital is only compounded when emerging businesses struggle to establish a client base and source of regular revenue.
One way struggling organizations can balance their checkbooks in the positive is to consider overhead costs, those expenses that are required to operate but do not directly drive revenue. Many small businesses perceive overhead as an inflexible expenditure that comes with doing business; however, by closely examining these expenses, you may find new ways to boost your net gain while streamlining your operations.
Optimize Administrative Spaces
There’s a good chance that most of your employees spend little to no time at all in the office, but that doesn’t mean there aren’t opportunities for your business to make its administrative spaces more cost-effective.
Take stock of your current office space, and you’ll find that there are two elements that contribute the most to high overhead: your monthly rent and the amount of energy consumed by the building and your employees.
Even if every desk is filled at your current office space, you may still have opportunities to cut that rent bill. Thanks to advancements in mobile technology, which help connect team members both inside and outside of traditional workspaces, many businesses have migrated to telecommuting to reduce the physical space needed to house administrative support. This allows you and your office teams to instead work from your home offices, local coffee shops or even a hosted coworking space in your area, lowering or even completely eliminating rent overhead.
Service businesses can also look into virtual offices as a way to host all of their administrative needs off-site. Virtual offices rely on the connectivity and collaborative power of internet tools, such as web conferencing and cloud services, to give each user on your team access to whatever information they need—be it payroll, a safety learning management system or your CRM database. This allows you to operate at the same efficiency while reducing the cost of rent and potentially facilitating a more productive work team.
Explore Digital Solutions
Businesses in all sectors struggle with old-fashioned hardware and business practices. Traditional record-keeping and communication methods—which rely on analog tools and paper documentation— are less efficient than their digitized counterparts.
To better serve the needs of mobile team members and reduce complications in your office technology, start by exploring a digital strategy. Strategic digital implementation helps businesses consider each and every angle of their processes that could be enhanced with the help of new technology. Because digital integrations are designed to transform all aspects of business operations, there are a host of tools and technology on the market that smaller organizations can research before the finalized purchase. Many of today’s business tools are hosted online, making them more affordable solutions than many of their hardwired counterparts.
Phone calls are one example of an overhead cost that’s been reduced with the aid of internet-based tech. Conventional phone lines use wiring to transmit voice messages, which means your business will need to pay for new phone hardware and phone line maintenance, on top of your monthly phone bill. Through internet telephony, specifically called VoIP, users can make internal calls with their fellow service technicians on smart mobile devices while they are out on the field so long as they are connected to the internet. By reading up on VoIP, small businesses can learn more about the specific ways that this new piece of communication technology can optimize customer communication. Your staff can better manage and respond to customer inquiries thanks to integrated tech solutions like auto-attendant and voicemail routing, which helps your business operate more efficiently and save on the bottom line.
Streamline Your Service Strategies
Business leaders in service industries are all too familiar with the finance balancing act they must play between employing their technicians and staffing office personnel to handle the day-to-day operations that come with running a business. By streamlining your office’s needs and expenses, you’ll be able to focus your hiring needs on more team members in the field and therefore deliver to a larger customer base.
To help businesses in service industries reduce their expenditures on administrative tasks, some SMB owners have looked into the benefits of Business Management Software. Designed to update and coordinate team schedules, automate customer confirmation emails and map out job assignments for those on the move. These tools can help businesses optimize their workforces, accomplishing the same tasks in less time and with fewer administrative costs.
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