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Business Overhead

9 Tips to Reduce Your Overhead

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Unnoticed small expenses can accumulate and take away a significant piece of your business’s profit. You must evaluate your business expenses and the value that they add to your business. 

Business expenses fall into either the overhead cost or operating cost category. Understanding the difference between the two is important because they impact your business’s financial health differently.

Difference Between Overhead Cost and Operating Cost

Operating Cost (Direct Cost)

These are expenses directly incurred by your business while offering dental services such as dental equipment and drugs. In short, these are the expenses you would not incur if you decided to close your business for a while. For instance, when companies were closed due to extreme weather, dental practices’ were not incurring any operating costs. However, most continued incurring consistent overhead costs.

Overhead Cost

Overhead costs are expenses indirectly incurred by your business while offering dental services. They include expenses such as insurance cost, insurance, software, heating, security, accounting, and rent, among others. 

Your ability to control your overhead cost can make your business resilient during tough times; therefore, it is vital to know how to reduce them to keep them as low as possible. 

This article gives you tips that can help in reducing your overhead costs.

1. Outsourcing Frontdesk Service 

Outsourcing the front desk services such as call answering and scheduling can help reduce the front desk cost.

This will eliminate the need to train front desk employees on the latest systems and protocols. Outsourcing these services is cheaper than employing an in-house employee to handle the calls and scheduling.

Having an in-house employee increases the operation cost because you have to prepare the office space and the electronic equipment that they’ll be using to perform their job. 

Outsourcing will reduce the number of employees in the office and thus free up more space, boosting efficiency and minimizing supervision costs.

2. Employ an Accountant

In the short term, this can seem like an unnecessary extra cost, but it is vital for a business that wants to keep a keen eye on its finances. An accountant ensures that all the business transactions are well documented, and the company remains compliant with tax requirements. 

Failure to comply with tax requirements can lead to hefty fines that can significantly impact your business’s financial well-being. 

Having well-maintained books will help you identify the areas where you should cut back to reduce overhead expenses.

3. Purchase a Smart Thermostat

Reducing the heating and cooling costs can significantly reduce the total overhead costs. A smart thermostat automatically turns on when the office is open and turns off when the office is closed. 

This ensures that the office is pleasantly warm during working hours and shuts down to save on cost as soon as the office is closed. Relying on your employees to turn the thermostat on and off often leads to the thermostat being left on through the night.

A smart thermostat is reliable and consistent. This makes the heating and cooling cost constant, which is suitable for the business’s financial plans. 

4. Renting Instead of Buying

Purchasing powerful equipment can be very expensive for the business and can lead to the company being overburdened with debt. Repairs of some of the dentistry equipment are also costly for the business and, in some cases, have led to powerful machines remaining idle after they break down.

Renting this equipment instead of buying takes away the high purchase expense, maintenance cost, and repair costs. This arrangement makes it easier for the business to bring in state-of-the-art machines when the machines currently in use become outdated. 

By eliminating the maintenance and repair costs, you reduce the business overhead cost associated with using the machines.

5. Rent an Affordable Business Space

Ensure that you rent a space that meets your business needs without straining your cash flow. You mustn’t rent an area that is too big that the cost per meter is too high compared to the income per meter. 

If the rented space is too small, it can affect the employees’ morale and your customers’ experience. By outsourcing some services, you can reduce the number of employees you need to maintain in the office, thereby reducing the premises’ size. Reducing the office space reduces other expenses such as insurance, heating, and cleaning costs.

6. Reduce the Size of your Permanent Team

Evaluate the roles played by each of your team members to ensure you are getting value for money. Avoid cases where you have permanent employees that don’t add significant value to the service that you are offering.

In some cases, a part-time employee can deliver just as much value to your business as a permanent, more expensive employee. For instance, you can hire a part-time employee to be cleaning the office or outsource the service to a cleaning company.

This will reduce your overhead cost and make your team more efficient. Outsourcing this service also reduces the supervision cost and ensures you get consistent cleaning services from professionals. 

7. Rent a Green Business Premise

If possible, rent an office space that is cheaper to maintain due to green energy features such as ample natural lighting, natural elements such as plants, and energy-saving fixtures. 

This reduces your energy cost and helps to boost your employees’ morale. 

Green working spaces also have the following benefits:

  • Natural light increases employees’ attention and their productivity
  • Creates a positive environment with productive engagements
  • It creates a healthy ambiance that creates a positive mindset in your employees and customers
  • It promotes environmental sustainability and improves your business image

8. Review Your Contracts

If your business has been in operation for a while and has several ongoing business contracts, reviewing them and renegotiating them can be an excellent way to save money. 

As your business grows, access to better contract terms should reflect your relationships and loyalty to your suppliers.

You should also research market prices to ensure that you are not overpaying for readily available services in the market. 

Maintain a record of suppliers who offer you services such as IT maintenance, electrician, and plumbers. This allows you to negotiate better prices based on past relationships and experiences.

9. Optimize Your Marketing Costs

In today’s highly competitive dentistry market, dental practices are spending more money marketing their business. 

Encourage your customers to recommend your services to other people by offering them exceptional service, word of mouth is practical to bring new business and at meager costs!

When possible, ask your existing customers for their feedback and ask new customers how they came to know about your business.

This will help you understand which marketing avenues are productive and which ones you should stop investing in.


Reducing your business’ overhead costs is not an easy process as it may require restructuring your team’s responsibility or moving from your current premises. 

However, taking control of your overhead costs by cutting expenses where possible will significantly improve your business’s financial health.