How To Reduce Your Store's Overhead Expenses

The single greatest expense of running a retail store is overhead. Whether your store sells apparel, electronics, sporting equipment, pet goods, groceries or any other consumer product, you can expect to spend money on overhead. It's a fundamental cost that's associated with all direct-to-consumer businesses. The good news is that you can typically reduce these costs by following some simple steps. For some helpful tips on how to reduce your store's overhead expenses, keep reading.

Technically, overhead is the term used to describe a broad range of operating expenses, some of which includes the following:

• Payroll
• Electricity
• Gas
• Water
• Telephone
• Official website
• Advertising and marketing
• Insurance
• Security system
• Accountant
• Taxes
• Travel
• Store and/or product repairs

Store Leasing

Reducing your overhead starts with choosing the right location for your store. Some retail business owners continue to pay an overpriced lease without realizing they could save thousands by moving to a new location. Sure, no one wants to spend the time and resources trying to move into a new location, but it could end up saving you tons of money in the long run.

As the very least, you should scout around for other potential locations for your retail business. Next, give the owner or property manager a call to find out how the lease costs. You can then talk to your current lessor to see if they are willing to negotiate a better deal with you. If not, then you should carefully consider the pros and cons of moving your business.

Utilities

Another area where retail business owners can oftentimes save money is with utility costs. Most city commercial districts have several different utility providers. Rather than 'hoping' that you're getting the best deal on your power, gas, water, phone and security, spend an evening calling around to the different providers to see what their current rates are. As long as you aren't locked in with a contract (which is never recommended), you should be able to switch without any problems.

Again, utility companies may be willing to negotiate lower prices to keep you as a customer. Don't be afraid to ask them if they will reduce their rates to keep your business. You might be surprised at just how many utility companies will drop their prices just so you're happy. And remember, the worst thing that can happen is the company saying no to your request.