Many business leaders take a hatchet to their overhead, lopping off employees and hacking away at vital programs and projects, all in the name of saving a buck. Unless you are in an absolute, existence-threatening crisis, that is almost always the wrong path to follow.
Here are some tips to help manage your overhead the right way.
- Watch your utility costs. It’s no different from managing your budget at home. Is the air conditioning pumping out vast quantities of polar air in the summer? Do you leave the lights on in unoccupied rooms? Is there a urinal that runs like a fountain due to a plumbing malfunction? It all adds up more than you might realize. Consider turning up the thermostat a few degrees or turning off unnecessary lights — and call a plumber.
- Where are you really getting a bang for your buck? Take a long, hard look at your marketing initiatives, your inventory, even your office supply room. You might be surprised where you’re losing money.
- Do you already have the talent, and capacity, in house? If you don’t make a hire, you won’t have to risk a layoff at a later date. If there is a way to improve the efficiency of your existing staff by reallocating duties, as opposed to committing resources to a new hire, you might want to consider doing so.
If you are interested in the services of FocusCFO, please contact us.
Next article in this series: How To Take Your Business From Break-even to Profitable
Previous article in this series: Development and Tracking of Performance Indicators
How FocusCFO can help manufacturers:
In manufacturing organizations, understanding all the components of a product’s bill of materials, such as labor, material cost and fixed and variable overhead, is vital to the profitability of the manufacturer. Investments in inventory and fixed assets are sizeable; therefore, returns on investment need to be sufficient to support the appropriate capital structure and bank financing. These are just a few areas where companies can benefit from outsourced CFO consulting services.
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