Running a business premises can get expensive fast. Costs mount up the moment you open a store, forcing you to spend more money than you usually have. Systems are costly to implement, and pay-offs usually take years to accrue, if they ever do.
Fortunately, there are several techniques you can use to minimize business premises expenses. These cut the cost of running your company and help to make it wildly more profitable.
So, what should you be doing?
The first thing you should be doing is creating community partnerships with other organizations to lower the total cost of running your facilities. Sharing upkeep on communal resources can dramatically lower your total spending and make your finances healthier.
Good examples include sharing the cost of events, promotional resources, and so on. The more community ventures you can be a part of, the more visible you’ll be, and the lower your premises will actually cost to run.
You should also be exploring how you can use the tax code to your advantage. Using benefits and incentives from the local government can massively reduce your bills and make running your commercial enterprise more profitable.
Remember, headline tax rates are rarely what most businesses pay. The vast majority use methods to cut their bills significantly through legal means.
Begin by contacting the local authorities and asking them whether they have any active schemes to reduce the amount of tax you pay. Most will offer something, subject to various conditions.
Using tax benefits and incentives is also something you can discuss with your accountant or finance team. These individuals usually know how to save you money, reducing the amount you send to the government through legal means.
Another way to minimize business premises expenses is to plan for future growth. Knowing what’s coming down the pike can help you make preemptive payments, instead of waiting for growth to happen and then panicking that you don’t have enough space.
You often see this problem cropping up at successful restaurants. Circumspect entrepreneurs begin their journeys investing in small, bijou premises to keep costs down and underestimate how successful they will ultimately be. The result is long queues out of the door, and people getting turned away who would have much rather dined at the establishment.
The best option for companies unsure about how much space they need is to lease. Leasing usually means you’re on a one-month rolling contract and free to upgrade whenever you need. If you require extra space, you simply inform the leasing company and tell them how many extra square feet you require over time.
You can also massively reduce your business premises costs by reviewing your insurance plans and making sure they are up to date. Insurers will often offer lower premiums if their actuarial tables change, or if you prove your location is lower-risk than they think.
The best way to do this is through abatement measures. Installing security and fire suppression systems encourages them to lower premiums because they prove you’re putting in the hard work to prevent damage to your property.
If you’re not sure what will lower your insurance premiums, ask your insurance company. Then get a member of staff to work out whether it is worth investing in abatement measures and the likely return. You can then compare this to the return on other investments your company might make.
Another way to minimize business premises costs is to analyze your location and think about whether it is absolutely necessary for your business to locate there. Locating in a prestigious downtown area might bring intangible benefits, but how concrete are these? Do you really need to locate in such an expensive part of town?
Consider what would happen if you moved to the outskirts of your city, or an entirely different place. How much money would you save and would it be offset by the costs of not being in an attractive city-center location?
Most firms are now discovering that building offices out of town on purpose-built estates offers far greater opportunities and enables them to attract the best talent. These parks are often better for workers because they are out of town and easy to access.
You might also consider getting costs down by performing more DIY maintenance on your premises. This way, you can slash the cost of callouts and focus solely on the things you need to do.
When you have the right know-how and materials, performing DIY maintenance is easy. For instance, you could consider redoing your roof to make it last longer. Corrugated roofing sheets offer strength and longevity, which can be highly beneficial in some circumstances.
You might also want to repaint your building or try to fix the signage yourself. Just remember to take the value of your time into account. You want to make sure going down the DIY route is actually costing you less.
Using more virtual meetings is also an option for office-based businesses. Cognitive companies and knowledge-based industries can often reduce the size of their premises by encouraging more workers to work remotely, off-site.
How do you make this work in practice? The trick is to rotate employees in and out of the office. Hot-desking lets you provide enough space for two-thirds of your workforce while keeping the remaining third at home, only inviting them to the office when you need them.
If you decide to host virtual meetings, it’s a good idea to keep them on a random cadence. This way, all your colleagues will eventually bump into each other in the office and can share their ideas.
You might also want to experiment with improving energy efficiency. Switching to LED lights and using heat pumps can lower the cost of running your premises dramatically.
Today, making energy-efficient upgrades to your buildings is generally inexpensive. For instance, you can get 80 per cent of the total possible benefits by doing simple things like sealing drafts under doors and installing a programmable thermostat. You don’t have to create a green building or cover your walls in vertical gardens to start experiencing benefits.
Related to the above points about virtual meetings, you can also give your workers more remote options. Letting employees work from home is an excellent way to reduce the need for extensive office space.
Most companies use this cost-saving method by hiring a core in-house team and then farming out the majority of work to people who live at home. For instance, you might keep customer-facing admin staff and key executives at an office, and then the people who produce the products or services could be at home. Many SEO agencies adopt this approach, with an in-office team providing HR and assistance to customers and colleagues, and then the majority of writers and designers working from their kitchens and living rooms.
Another strategy you might want to try is subletting your existing leased space. If you took out a large lease and can’t change it, this approach can be an excellent way to lower your overall costs. Subletting can help you get a significant chunk off your bill every month. And it allows you to explore working from home and remote options more freely with your staff. Suddenly, you can offer them the flexible working benefits they want without compromising earlier investments.
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