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10 Cost Reduction Strategies for Opening a New Office

Opening a new office could be a great way to expand your business or pursue new business opportunities. But it can also be a massive expense if you aren’t careful. Too often, motivated entrepreneurs sign up for release that is far more than they can reasonably handle, or they overbuy on supplies, ultimately limiting their profitability and offsetting the productivity and morale benefits of having all your employees in one place.

The Path to Opening a New Office

There are many good reasons to open a new office. If you’re transitioning from a remote team, you might be interested in preserving a more cohesive organizational culture or having more face-to-face interactions throughout the day. 

You may also be interested in expanding the business into a new area, such as a different city, or you might want to physical presence in place with significant foot traffic. Whatever your motivation is, it’s a good idea to roughly estimate the financial impact of the move. 

How much new business do you think this will generate? How will productivity increase, and how will that affect your bottom line?

Once you have a better understanding of the benefits of opening a new office or a medical clinic with the help of your medical office broker, you’ll be even more motivated to control your costs.

Cost Reduction Strategies for Opening a New Office

Keeping a tight leash on the expenses of opening a new office will help you maximize the profitability of this strategic maneuver.

  1. Use office inventory management software. The right office inventory management platform can make a big difference in how you spend money on office supplies. It’s tempting to imagine that office supplies are an innocuous expense – something barely noticeable in your financial analysis. But the reality is, you could end up spending thousands of dollars on equipment, paper, miscellaneous supplies like staplers, and more. Office inventory management software will help you keep tabs on these expenses, ensuring that you never run out of what you need, but also that you’re not overspending on these items.
  2. Choose the right area. One of the most impactful decisions you’ll make when choosing a new office is deciding where it will be. Some areas are inherently much more expensive than others. An office on one side of the city may cost $5,000 per month to lease, while the same office on the other side of the city may cost $10,000 per month to lease. Sometimes, compromising on the location can lead you to massive savings.
  3. Don’t overbuy. Business owners are sometimes tempted to buy a bigger office than they actually need, anticipating room for expansion later on. This isn’t necessarily a bad strategy, especially if you have evidence to support your future growth potential, but it’s usually better to remain more conservative. Bigger offices are much more expensive, and for several reasons, so don’t overbuy.
  4. Negotiate the lease. When you find a location you like, be prepared to negotiate the lease. If you express sincere interest, your landlord may be willing to lower your rent or waive certain expenses to get you in.
  5. Consider subleasing. If you’re spending a lot of money on the lease and you have some extra room in the office, consider subleasing. Assuming you’re legally able to do so, subleasing is a convenient way to supplement your income and offset your monthly rent expenditure.
  6. Reduce paper needs. It’s hard to go completely paperless, since we use paper products for all kinds of things. But as much as possible, you should strive to reduce your paper needs. Use software and digital tracking rather than pen and paper where you can; drastically reducing your paper needs can ultimately save you thousands of dollars per year.
  7. Minimize waste. Unfortunately, many office supplies go to waste simply because people don’t know how to handle them or manage them. Make sure to train and educate your employees to minimize waste as much as possible.
  8. Analyze and improve your utility consumption. Don’t forget about utilities. Your electricity, water, natural gas, and other expenses can quickly compromise your financial plan. Spend time analyzing your utility consumption and reducing it when possible.
  9. Negotiate with suppliers. Don’t hesitate to negotiate, even if you don’t have much experience in this area. Suppliers and partners responsible for keeping your office well-stocked will likely be willing to make compromises to retain you as a customer.
  10.   Reduce staff costs. Finally, consider reducing staff costs. Labor is one of your biggest expenses in managing a business, and it can quickly spiral out of control as you try to fill up your new office. Only hire people who are necessary (and rely on contractors to fill in the gaps).

Office cost reduction strategies aren’t something that only comes into play when you’re initially moving to a new office. It’s something that you should be thinking about throughout your tenure as an entrepreneur or office manager. 

The more experience you have, the easier it will become; in time, office cost mitigation will come naturally to you.