Once you start a business, you’ll be surprised at how quickly your expenses can add up. At the start, these unexpected yet necessary cash outflows can be worrying. Once you gain confidence in your management abilities, however, it becomes easier to just accept certain payments as necessary costs of doing business.
That said, across virtually every industry, runaway overhead expenses can hinder young businesses from establishing a strong foundation. Vigilance and smart financial planning stand out as crucial factors that will help you avoid such setbacks.
Thankfully, managing overheads wisely doesn’t have to be complicated. Regardless of what your business does, you’re bound to have several options for mitigating your financial burdens. Let’s look at how you can keep your growing business costs in check.
1. Keep Your Personal and Business Finances Separate
Once you incorporate your business, you’ll want to open a separate bank account for it right away. This isn’t just for maintaining professional appearances or for complying with Philippine tax laws, either. Business-focused savings accounts tend to have better perks and interest rates compared to personal savings products, which helps guarantee optimal growth for your business’s funds.
2. Audit Your Expenses Periodically
At the minimum, you should conduct quarterly expense reviews to identify areas of overspending or inefficiency. Outside of your expense reports, you should also be looking at market movements and current events to identify potential cost-saving opportunities. If, after making your analysis, you believe it no longer makes sense to keep paying for something, consider an alternative or remove it from your budget altogether.
3. Use the Best Online Payment ProcessingSolutions
Using the right online payment processing solutions can help reduce your overhead costs through lower transaction fees, streamlined administrative tasks, and providing faster payment processing while reducing the risk of fraud and chargebacks.
Moreover, your internet payment solutions must allow every customer to have their preferred online payment processed without issues. If a customer has to use a payment card or digital wallet that they don’t have, they’re likely to just go to a competitor, which will be bad news for your baseline cashflows and overhead.
To accept all of the Philippines’ available digital payments, make sure to integrate Maya Checkout into your e-commerce website. With its easy site integration through Maya plugins for Shopify and WooCommerce, you can start accepting all credit card, debit card, QR Ph and digital wallet payments in minutes. If you run your business over social media or email, you can also use Maya Payment Links and Maya Invoice Payments to quickly facilitate any digital payment method over alternative channels like messaging apps and email.
4. Leverage Cloud Technology
Unless you actually run a cloud service yourself, there are few reasons to maintain onsite servers for your data and applications. Go for cloud-based solutions when possible and avoid expensive server maintenance costs entirely.
5. Keep Tabs On Your Energy Consumption
You should be conducting an annual general audit of your establishment’s assets and taking note of their age and energy consumption. Servers, manufacturing equipment, and air conditioners are especially power-hungry, so you may want to consider replacing these with newer energy-efficient models whenever it becomes feasible. You can also enact employee policies on energy use to minimize energy waste.
6. Outsource Non-Core Functions
Also consider outsourcing some non-core functions that your business might have. Depending on the type of small business you’re operating this can range from accounting and IT support to creatives and customer service, all of which can be offloaded to specialized service providers. Outsourcing can often be more cost-effective than hiring and managing in-house staff for these tasks.
7. Implement Telecommuting or Remote Work Policies
It’s also worth considering to encourage and implement telecommuting and remote work arrangements for your non-critical staff to reduce the need for office space and associated overhead costs. In many cases remote work can also lead to increased productivity and employee satisfaction. This is on a case-by-case basis, however, as some roles will require employees to be physically present in the workplace, if not every day then on a hybrid work model.
8. Optimize Inventory Management
If you’re operating a retail business, it’s also a good idea to come up with ways to make your inventory management more efficient. This way, you’ll be able to minimize carrying costs, excess inventory, and the risk of product obsolescence. Explore how you can use inventory tracking systems as well as customer demand forecasting tools to ensure optimal inventory levels and reduce storage expenses.
9. Keep Tabs On Your Loans
Business loans are often necessary for initial operations and for covering emergency expenses. However, overreliance on loans for cash flow and neglecting to keep up with existing payments can rob your business of its growth potential. Always prioritize your repayment schedules and any associated fees to avoid unnecessary financial strain. If loan payments comprise a big chunk of your overhead, consider refinancing or consolidation to give your business some breathing room. In the future, you can also consider choosing credit options that offer more borrower-friendly fees, like Maya Flexi Loan.
10. Don’t Reward Yourself Prematurely
Gratification expenses, such as gifts, bonuses, or rewards given to employees, clients, partners, or oneself are typically not considered overhead costs because they are not directly related to the day-to-day operations of the business. However, many business owners often take these discretionary expenses into account because they affect their bottom lines.
There’s nothing inherently wrong with starting a business for the financial rewards. However, premature self-rewards can undermine your business’s stability as well as its credibility with potential investors. If your business’s finances are tight, you may want to hold your gratification expenses until you’ve met your obligations.
Keep Your Overheads in Check with Maya Online Payment Solutions
Maya Business offers cost-saving payment processing on all of your online storefronts. Whether you run an e-commerce site or simply want to add online channels to your brick-and-mortar store, Maya Business’s selection of online payment solutions makes it incredibly simple to cut costs and boost cash flows. Sign up for Maya Business to activate Maya Checkout and other innovative efficiency-boosting solutions.
Creating a Maya Business account automatically provides access to a Maya Business Deposit account for your settlements and savings. With an industry-leading 2.5% per annum interest rate, you’ll earn PHP 25,000 in interest per year on every PHP 1 million deposit. You’ll also enjoy free cash transfers to partners and suppliers via InstaPay and PESONet, giving you more ways to save.
Signing up for Maya Business also qualifies you for a no-collateral Maya Flexi Loan valued as high as PHP 2 million within just 3 months. Use your Maya Flexi Loan to help audit your processes to bring your business to peak efficiency. For bigger subsequent loan offers, use Maya Business as your primary processor for all digital wallet and card payments.
Sign up for Maya Business to access Maya Checkout, Maya Plugins, and other cost-saving Maya Business solutions.
