| What's overhead? Not just the roof. For a small | | | | products made by indigenous people around the |
| business overhead is usually the debt hanging over | | | | world. The resulting reduction in overhead has |
| the small business owner's head. Actually, | | | | allowed the business to expand their marketing |
| overhead is the ongoing general cost of running | | | | efforts, and the increase in cash flow is the |
| your small business, and can include items like the | | | | overall result. |
| cost of carrying inventory, office supplies, | | | | 3. Renegotiate the Cost of Regular Business |
| payments on equipment, and the cost of service | | | | Services |
| providers like accountants and lawyers. | | | | Most small business owners are too busy to |
| In this article, I outline four ways to decrease | | | | price-shop, but you'll find that you can negotiate |
| your company's overhead. These simple solutions | | | | lower costs for regular services your business |
| can help your business preserve cash, and stay | | | | buys by doing just a little price shopping. Call |
| solvent. | | | | around and get three to for quotes for regular |
| Decreasing Small Business Overhead | | | | business services, including insurance, long distance |
| 1. Barter with Others | | | | phone service, equipment maintenance, and |
| Trading products or services with other | | | | delivery services. Once you find the best rate, go |
| businesses is one way to reduce your overhead. I | | | | back to your current supplier and suggest they |
| often use this approach in with my small | | | | meet the price. If they refuse to do so, consider |
| businesses. I may trade my writing services or | | | | setting up an account with another, less |
| web-design work for graphic design services or | | | | expensive service. |
| legal advice from another company. Bartering | | | | 4. Join a Buying Co-op |
| works well so long as both parties have goods or | | | | Buying in bulk is always less expensive. Many small |
| services of equal value to trade. If you're not | | | | business owners are now forming buying co-ops |
| sure how to go about bartering, check in with | | | | to purchase office supplies and equipment in bulk. |
| your local Chamber of Commerce, which may | | | | For instance, many office supply stores offer |
| already have a barter network in place. | | | | discounts for buying paper, ink, or toner in bulk. If |
| 2. Reduce Inventory | | | | you don't already have a buying co-op in your |
| The cost of carrying inventory makes up a large | | | | area, call up a few of your fellow small business |
| percentage of the overhead for many small | | | | owners and create one from scratch. You can |
| businesses. While it's essential to provide your | | | | also call your local Chamber of Commerce to see |
| clients with what they want, there are ways to | | | | if a buying co-op exists in your area. |
| do that while trimming your inventory. First, | | | | Reducing small business overhead is really a |
| review your inventory to identify which items are | | | | matter of paying attention to the details. Often, |
| hot-sellers and which have been sitting on the | | | | the savings you get from renegotiating your |
| shelf gathering dust. Next, locate the items that | | | | insurance policy or buying in bulk may not seem |
| generate the best profit for your business. Finally, | | | | like much, but if you add up all the small savings |
| trim the low-profit and slow-selling items from | | | | you'll find that your average annual savings can be |
| your inventory. You can even turn this action into | | | | significant. These days, when cash is vital to |
| a benefit that can be conveyed to your | | | | business survival, pinching pennies where you can |
| customers. Turn an inventory reduction into a | | | | is often the difference between a thriving |
| "specialization." For instance, one gift store | | | | enterprise and a bankrupt business. |
| business reduced inventory by carrying only | | | | |