How to Reduce Overhead for Small Businesses

Business overhead costs are classified as the expenses that are required in the day to day of running a business. Overhead expenses can include fixed costs – like office space leases, insurance, and employee salaries, or varying expenses – like repairs and advertising budgets. In order to increase profitability, it is crucial to reduce overhead for small businesses.

During slower seasons, cutting overhead is typically one of the easiest ways to reduce losses to get you back on the path towards profitability. 

Typical overhead costs include:


Lease costs can be reduced by moving your business to a new location, or negotiating new deals with your landlord. You can even hire a virtual assistant to do the negotiating and location scouting for you, so that you don’t have to give up valuable business hours.


Including gas, water, sewer, phone, and internet services. There are several ways to reduce your utilities costs. Internet and Cell Phone usage should be reviewed annually to ensure you are only paying for what you need – there may be potential savings available by switching to lower-cost plans.


Every business needs insurance coverage, which may include property insurance, general liability insurance, professional liability insurance, and business interruption insurance. The cost of your insurance plans will vary from provider to provider, – you can utilize a virtual assistant again to research the best options for your business.


Includes your ongoing salaries, benefits, office supplies. The easiest way to reduce administrative expenses is to cut staff, or to consider utilizing an outsourcing provider. When you hire virtual, you pay an hourly rate and do not need to factor in the expenses of insurance and other benefits. By utilizing virtual teams, you gain access to global talent at a lower cost than salaried or part time local employees.


If your business uses special equipment or vehicles, the cost of maintenance and repairs can be overwhelming. Shifting to hybrid or fuel-efficient models can help cut costs here.


Expenses related to marketing your services or product – THIS includes wages, benefits, incentive bonuses, advertising, promotional materials, cost of trade shows, etc. Reduce overhead in your sales and marketing departments by hiring virtually to integrate with your existing teams, or to act as a standalone department.


You can reduce your accounting and bookkeeping overhead by doing some or all of the business accounting chores yourself, or by hiring a virtual bookkeeper.

As you can see, there are several ways to reduce overhead for small businesses during slower seasons – you probably also noticed that you can avoid the grunt work of doing it yourself by hiring virtual teams. If you are ready to hire virtually, Schedule a Discovery Call to learn what Rocket Station can do for you.