Overhead cost can be an issue, even for the most established businesses. In a market as competitive as it is today, companies are trying to stay lean and limit their overhead costs in an attempt to remain flexible and competitive. Unfortunately, absorbing more fixed costs is often necessary for the business to grow.
If you want to expand your business while staying lean, there are actually several interesting solutions you can consider. We are going to look into some of those solutions in this article.
Outsourcing and Working with Freelancers
Outsourcing is one of the best ways to deal with spikes in demand, a sudden increase in workload, or for reducing HR costs altogether. It is also more accessible than ever thanks to the many services you can now access online.
The same can be said for finding freelancers. Instead of hiring someone on a full-time basis, you can now hire professionals – experienced ones nonetheless – for projects. When the projects are completed, you can use the services of the same freelancers on other projects as well.
Both of these solutions deal mainly with the cost of hiring and maintaining employees. Your business still needs core team members to operate smoothly, but each team member can expand their capacity by having a lot of freelancers and service providers working under them.
Co-Working and Remote Working
Another common overhead cost you can now avoid is the cost of renting an office space. When you have a big team, you need sufficient space, more office equipment, and supplies and, of course, you have to deal with the extra costs of maintaining that big team; the energy bills are certainly bigger when the business has many employees.
Remote working is the way forward. Employees don’t have to come to the office to be effective. They can work from anywhere in the world and still deliver great results every single time. The better cloud solutions we have today certainly make remote working more effective, especially for small and lean businesses. Real-time communications like video and chat (https://www.agora.io/en/products/chat/) are available to businesses so they can keep in regular contact with their employees.
This doesn’t mean you can’t have a beautiful office. It just means you can rely on serviced offices from providers such as The Workplace Company. This type of facility allows you to rent an office or a meeting place at short notice.
Rapid Prototyping and Offshore Manufacture
The last piece of the equation is lowering overhead costs associated with manufacturing your products. Bringing a product idea into its mature stage is a lot easier – and more affordable – today thanks to rapid prototyping and the technologies around it. Instead of spending months building a mock-up, for instance, you can now 3D print your product in a matter of hours.
With a clear and working prototype created, it is also easier to outsource the entire manufacturing job to third-party service providers. This means you can take advantage of the low production costs offered by companies based in China, Mexico, and Brazil as well as other countries around the world.
These are simple strategies and steps to implement, but they are the strategies that will help your business keep its overhead costs under control. Lower costs translate to more flexibility; that is what will give your business a competitive advantage over your rivals.