4 Tips to Reduce Overhead Spend Using Outsourced Support


Finances are tight for everyone. With inflation at rates that we haven’t seen in decades, businesses across all industries are being forced to tighten their belts and do more with less. However, that doesn’t mean that you have to go without critical business services. 

You can use outsourced support to reduce overhead spend while still handling mission-critical business services and operations. In this post, we’ll highlight four essential tips to help you cut overhead spending with the right outsourced partner.

What’s overhead all about?

All businesses must deal with overhead, but what is it, really? It’s defined as expenses incurred by the business that are not directly attributable to the creation or delivery of a product or service. It’s made up of ongoing business expenses that come straight from your bottom line without necessarily contributing to your profitability. Some common examples include:

  • Rent
  • Advertising
  • Office equipment
  • Shipping costs
  • Legal expenses
  • Insurance premiums
  • Payroll 

Overhead is broken down into fixed, variable, and semi-variable. And while some of the services driving these costs cannot be outsourced, many of them can.

1. Analyze your spending

Start with the basics. You can’t control what you don’t measure, and if you’re not analyzing your spending, it’s all too easy to find that your outsourcing efforts don’t yield the desired savings. What is your overhead percentage? What’s driving those costs? You might find that you can reduce overhead with a combination of smart cuts and outsourcing or that you can focus solely on outsourcing to achieve the financial savings that you need to make ends meet. 

For instance, reducing your rent might be as simple as downsizing to a smaller property or finding a cheaper business facility on the other side of town. The cost of utilities could be offset through improved usage and investing in renewable energy. Profitability can be boosted by reducing lost time and distractions in the office. 

The point is this: know what you’re spending, where the money is going, and why you’re spending in that area. By tracking and analyzing your spending, you get a better picture of how cash flows into and out of your business so you can make informed decisions when it comes to outsourcing.

2. Identify the key business processes you want to outsource

Outsourcing business processes have been around for a while. Companies have been outsourcing processes like accounting and payroll to specialized firms for decades. Chances are good that you work with business partners for your marketing and advertising needs, too. What other tasks can you outsource? This isn’t a decision that should be made blindly, either. Consider the following when choosing between processes to outsource:

  • How much time does my team spend doing this task/handling this process every day?
  • Would outsourcing this process give my people more time to focus on what they do best?
  • Is outsourcing this process beneficial to my customers or my business?
  • What are the tradeoffs with outsourcing this process rather than keeping it in-house?
  • Is there a trustworthy outsource service provider that can offer cost-effective, high-quality results while not costing a fortune?
  • Can we outsource this process while improving the quality of outcomes/outputs?

Here’s an example:

You analyze your overhead and find that your team is spending too much time fielding phone calls. Between spam and robocalls, customer calls, vetting leads, and other communications, they’re focusing too little on what they do best. By outsourcing some or all of your business communications to a virtual receptionist service, you can dramatically boost productivity, reduce downtime, cut costs, increase profitability, and ensure a better experience for customers and leads. 

3. Choose the right partner for your outsourced services

If we lived in a perfect world, all business process outsourcing providers would be worth your time and money. Sadly, we don’t live in such a world. Business process outsourcing partners vary in quality, range of services, costs, and much more. You must make an informed decision here based on a few concrete factors, including:

  • Reputation – What’s the company’s reputation like? What do their current and past customers have to say about their experience? Would they repeat it? 
  • Range of services – You also need to consider the range of services offered. For instance, does the company only offer phone answering during standard business hours? What about appointment setting? Lead intake? Appointment reminders? After-hours answering? 
  • Cost – Finally, make sure to balance the cost of the outsourced service provider with your projected financial savings. This isn’t just about how much you’ll save by outsourcing. It also includes other costs associated with your soon-to-be partner. For instance, does the company work on a flat-fee basis, or do your costs rise and fall with demand? 

4. Analyze the relationship (and your financial savings) over time

Once you’ve chosen your partner, keep an eye on the relationship and your level of financial savings over time. Again, if you don’t measure it, you can’t manage it. Track partner performance, related issues, and costs throughout the relationship. 

What you’re looking for is to make sure that you continue seeing the same financial savings without a drop in service offerings or quality. It’s all about being informed about what you’re getting for your money so you can spot when the situation changes. 

Smith.ai helps you save money while building a stronger business

Outsourcing key business processes is not new, but don’t limit yourself to accounting and payroll. The key is to identify areas where your people are spending too much time and focus, taking them away from key responsibilities. Often, business communications fall into that category. Between fielding spam calls, returning messages, replying to emails, and screening new customers, it can leave little time for your people to do what they were hired to do. 

At Smith.ai, our virtual receptionists take the burden off your team while ensuring that your phones are answered 24/7. We can also offer lead screening, appointment scheduling, spam blocking, outbound callbacks, and even email and SMS follow-up. Our goal is to help you reduce your overhead while improving business processes and profitability.

To learn more, schedule a consultation or reach out to hello@smith.ai.

Business Education
Virtual Receptionists
Written by Samir Sampat

Samir Sampat is a Marketing Manager with Smith.ai. He has experience working with businesses of all sizes focusing on marketing, communications, and business development.

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