You’ve probably heard the term “overhead” thrown around a few times. Business is a dynamic and multifaceted phenomenon, especially these days. The internet has changed the way we do business and advanced technologies like artificial intelligence and automation have shown humanity that tech will continue to change the way we think about business, products, and making money.
Between financial tech services, remote work, and the ability to cut down on production costs, business is changing all the time. The overhead is the money that has to be paid every month to stay in operation. The lower your overhead, the higher the profit. Below are some tips to lower your business’s overhead.
Hire Sparsely & Remotely
When you’re operating a business, you’ll probably need to hire a few employees. It’s possible to run your company on your own, but as you grow you will need a little help. Depending on what you are selling, you can hire people to manufacture the product, work on your social media presence, or handle administrative work.
If you need to keep your overhead low, you should try to hire sparsely. You should also think about hiring remotely. With remote workers, you can eliminate the need for office space. You won’t have to rent a space or buy property. It all depends on your product and business model, but if you know how to work with few people and keep the quality of your product high, you’re on the right track.
Work with Bloggers
One way to get some promotion and keep your overhead low is to work with bloggers instead of traditional advertising. Blogs can have a lot of traffic these days. They can make people legitimate money with ad revenue and other sponsorships. If you have someone in mind, send them some free products and ask for a blog post in return.
You can get a lot of eyes on your set, brand, and product for a nominal price. People like free stuff, but even if they want to be paid you can probably get away with a small fee. In general, going for the non-traditional route for promotion and marketing can really pay off. You can get other people to do the marketing for you. Trading referrals on your own blog or sending your product to reviewers can keep your overhead low when you are trying to advertise.
Cut Deals with Shippers, Audit the Big Ones
When you are shipping parts to and from your headquarters or are sending finished products to buyers, one of the most important parts of keeping your overhead low is keeping your shipping costs low. Logistics can really take a chunk out of your bottom line. One thing you can do is work with small shippers and cut a contract to do all your shipping for a discounted price.
If you must work with large private shippers and have been ripped off, you can audit them. For example, a FedEx audit can reveal how you were overcharged and provide refunds for those shipping purchases. You will likely need to hire a third party, but if you’ve been losing money to big shippers for a while now it could be worth it to audit them and get some of the money back.
Produce Only What You Sell
With a lot of products, you can produce only what you sell. This is a production model that has become popular in a few industries. The field of t-shirt selling is one of them. If it is possible for you to produce only the amount of product you sell, you won’t have inventory you need to store and get rid of. This may not be possible for everyone who sells online, but in general it is a good idea to manufacture the products that you are going to sell. Analytics come in handy here.
Online businesses are versatile. Each one has its own tactics and business model. Every business needs to keep their overhead low, but especially for online companies. If you hire a few people who work remotely, find interesting ways to market your brand, and lower your production and shipping costs, you’ll be able to increase your bottom line. When you are trying to make it with an online business, it’s all about business.
