Cutting overheads without cutting corners
When money is tight, the first instinct is often to drop prices to win more work. Usually that's the wrong move. Before you touch your prices, look at what it costs to keep the doors open.
What counts as overheads
Overheads are the costs you pay whether you have a job on or not. For most trade businesses that includes:
- Vehicles and finance repayments
- Insurance, licences and memberships
- Phones, software and subscriptions
- Rent, storage or a yard
- Admin, bookkeeping and accounting
- Marketing and advertising
Every dollar of overhead has to be recovered through your pricing. The higher your overheads, the more every quote has to carry, and the harder you are to compete with.
Where it creeps up
Overheads rarely blow out in one go. They creep. A subscription nobody uses. Two phone plans for the same person. Insurance that rolled over without a comparison quote. A ute upgrade that felt deserved after a good year. Each seems small. Together they can add thousands a year.
Cut the waste, not the quality
Cutting corners on materials or safety is never the answer. It damages your reputation and costs more in callbacks. The goal is to spend money where it earns money and stop spending it where it doesn't.
A simple test for every regular cost: does this help us win work, do work, or get paid? If not, question it.
The ute question
A shiny new ute on lease feels like a sign of success, but it's a big fixed cost every month, good months and bad. That doesn't mean you shouldn't have one. It means it should be a decision made with your numbers in front of you, not on a good feeling after a big job.
A one-hour overheads review
- Pull 12 months of bank and card statements
- List every regular payment and what it's for
- Mark each one essential, useful or not needed
- Cancel or renegotiate the last two groups
Most businesses find savings in the first hour. The bigger gains come from structuring the business so overheads stay in proportion as you grow, and that's the part we work through with clients one-on-one.
General information only, not financial, tax or legal advice. Speak to your accountant or adviser about your own situation.