3 THINGS YOU MUST DO BEFORE APPLYING FOR BUSINESS FINANCE Funding and Business Growth Playbook T: 0330 350 3356 @: hello@GrowingYourNumbers.com www: growingyournumbers.com
Overheads are also referred to as Fixed Costs and they include things like office rent, insurance, office furniture, company cars, professional memberships and other expenses that do not change from year to year.
For example, manufacturing overheads include such things as the electricity used to operate the factory equipment and building, factory supplies and factory personnel that are not directly engaged in the production process.
Mortgage payments or rent is a fixed overhead expense. A fixed cost remains unchanged even if the level of activity or volume changes.
You need to continually review your suppliers and the prices you are being charged because things change and whilst suppliers are generally quick to increase prices when they need to, they are frequently less proactive when it comes to reducing them again.
It is important to make sure you are not incorrectly recording costs as Overheads when they are in fact a Cost of Sales.
Remember, any savings you can make in your Overheads contribute directly to your Net Profit, or your Bottom Line. As you will have seen with Alex ’s Software Company, the £10K reduction in Overheads resulted in a £10K increase in Net Profit making this the most obvious place to start looking for quick win cost savings. You can only cut costs so far, to grow a business you have to be able to grow your sales, and to do that, in addition to looking for ways to sell more to existing customers, you need to look for ways to acquire new customers, so let’s discuss New Customer Acquisition.
To discover quick, easy ways to improve Gross Margins and reduce Overheads (or even better, get more out of what you are already paying for, click the link below and reserve your place on the upcoming Funding and Business Growth Seminar.
New Customer Acquisition
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