Reducing Overhead
Business overhead is simply the cost of keeping your doors open. If your consulting services business is located in your home, overhead costs are probably small. But if you have an office and office personnel, your overhead is greater. It's also large if you have high debt to banks, suppliers, and backers.
Start Small
Depending on your consulting services market, start with an office in a corner of your home. If you build the client's perception of quality with your product, you won't have to maintain impressive offices.
Manage Supplies
You can also reduce overhead by carefully watching the costs of supplies. Printed stationary is an excellent way to promote the quality of your business, but you don't need printed notepads unless the client will see them.
Manage Travel
Travel expenses can easily get out of hand without good record keeping. Develop a simple system for tracking transportation, lodging, meals, phone, and other costs.
Labor cost is one expense that can quickly eat at away the profits of a small consulting services business. Don't hire an office manager or a secretary until you absolutely must. It's more profitable to do the required filing and office functions yourself after normal business hours or on weekends. Or you can ask the help of a spouse or older child who could be put on the payroll as soon as your business can afford it.
Buy supplies in quantity if you can, but don't buy more than you will use in three to six months unless you're certain that they won't become out-of-date. Pens that include your business name and phone numbers are generally inexpensive. But don't buy so many that you still have hundreds when you change your address or phone number and can no longer use them.
Hire Temp Help
Some small consulting services use temporary help or outside services rather than hire employees and deal with all the taxes and records that come with it. Records can be kept by a bookkeeping or accounting service, office cleaning can be done by a janitorial service, telephones can be answered by an answering service, and correspondence and retyping service can be performed by a secretarial service. Consulting jobs that the owner can't handle are contracted out to other consultants. The complexity of regulations and taxation is endlessly multiplied when the first employee is hired — so avoid hiring anyone until your success requires you to do so.
Telephone Expenses
Long-distance phone calls can quickly add to your expenses and cut into your profits, especially when they are personal calls made by employees. Many successful consulting services use a telephone call record to keep track of long-distance calls, then compare the report with the monthly phone bill. Calls not listed on the report are assumed to be personal calls and should be checked out.
Keeping an Eye on the Future
As your consulting service grows, your task of managing a successful business becomes more complicated. You must consider and plan for the loss of a key person or the business structure. You must remind yourself to enjoy what you're doing. You must review your options if the business fails. You must consider the long term and begin planning for retirement. Planning well for tomorrow can reduce your worries today.
