Any business would incur overheads that could be fixed overheads such as rent, salaries and annual permits, and variable overheads such as raw materials (dependent of sales volume, utilities that depend on how much is used and wasted, stationery depending on how frugal employees are).
While there is nothing much that can be done about fixed costs unless new contracts are drawn or renegotiated, variable costs hold the key of tweaking your business to an optimal level where you would be saving thousands and thousands of dollars or maybe even hundreds of thousands depending on the size of your business.
The little things that you take seriously in business is not about being a stickler and making things so rigid that employees find it difficult or uncomfortable to work, it’s actually the total opposite provided you see it from a business perspective and not any other.
Most employers would love to keep their employees happy, but this becomes difficult because among the things that make employees happy is money and using money from profits to reward employees apart from their salaries could create management issues and cause shareholders to lose confidence in the financial management of the company.
So how do you about this – create a win-win scenario where nobody feels the pinch, but everybody gets a piece of the pie! How do you do this? Read On!
Variable costs for operations are a Pandora’s Box of goodies that when the items in it are tuned up, the rewards come in the form of cost savings which could be split between shareholders and employees.
For example, let’s say that the amount of energy used by your business premise that is managed by 20 employees is 250 dollars a month and the cost for in-house stationery use is 50 dollars and the amount of receipt paper, bond or thermal paper rolls, you issue to customers on a daily business accumulates to100 dollars a month. Let’s say that the premise has some empty spaces that are underutilised on top of everything else. There right there looks like more than 1000 dollars in savings in a year.
How? Keep Reading!
Utilities could easily be reduced by nearly 20 % if the air-conditioning for the premise is shut down an hour before the business closes and only turned on at 50 % capacity for the first 2 hours in the morning before turning it on full scale. Changing all your light bulbs and adding dimmers could save you up to another 3 – 5 %! That alone is about 50 dollars in savings each month, not much? Now the underutilised space on the premises could be ‘rented’ dirt cheap adding value to what the business premise has to offer, even if it is rented out for only 100 dollars a month, just watch what happens!
Now if you use bond paper for receipts, maybe you could consider thermal paper rolls for receipts and make it policy that receipt paper is only given out upon request, you might stand to save about 10 dollars every month and if stationery used by your employees is brought under control you may just save about another 10 dollars. Now add all that up and you have 50 + 100 + 10 + 10 which amounts to 170 dollars each month x 12, it adds up to 2040 dollars and you have 10 employees.
That spells an extra 204 dollars during Christmas in the form of cash or gift vouchers that employees will love you for and motivate them to save more for your business!