How to add $100,000 to your bottom line this financial year

Written on the 8th of July 2010 by Michelle Carr

How to add $100,000 to your bottom line this financial year

More and more Australian businesses are outsourcing key administrative support services such as bookkeeping, payroll, marketing and IT to reduce their headcount , save costs and increase their value by adding valuable professionals.

As the economic downturn is really hitting home for some businesses many SMEs are opting to close their offices to eliminate rent and set up virtual offices instead for a fraction of the cost.

The past 12 months has seen small-to-medium businesses, and even larger companies, choosing to outsource a number of their administrative functions so they can reduce costs without downsizing their business or downsizing operations.

Businesses are realising they can effectively reduce their costs by using external providers rather than paying full-time wages to keep certain roles in-house and watching as the cash flow improves as does the bottom line and business operations.

A case study of this is one of SBE's customers with a group turnover of $3.5 million, which previously had 2 administration people, 1 part-time administration in a head office to run and manage functions such as accounts and marketing.

Here’s what they saved :

Gross Wages at $50,000                $175,000

Superannuation                              $ 15,750

Workers Comp                                $ 1,000

Rent p/a                                         $ 42,000

Insurance                                       $ 1,500

Electricity                                       $ 3,000

Phone and Internet Service           $ 9,600

Average Cost per year for IT         $ 2, 750

These cost savings has seen a sharp rise in the number of businesses that have opted to move away from having a physical office, outsource and discover a pool of people trained and well established in business practices at their disposal and because they are sharing and leveraging the services they only pay for a fraction of the cost.

At Small Business Evolution more than half of our clients no longer have the need to actually have office space. They can streamline their entire operations and mobilise their business, but still have that professional business front.

This just isn’t a solution for big SME operations either with many small business experiencing growing pains or wanting to expand without the expensive setup costs and added overheads.