Overhead Costs you know, Say ‘Hello’ to Overhead Efforts!
What does the term Overhead Costs mean? Overhead costs are the basic ongoing expenses to keep the business running – operating expenses. Or as Investopedia puts it – “overhead is any expense incurred to support the business while not being directly related to a specific product or service.”
Overhead costs consist of fixed costs, variable costs or a combination of the two. There are also different categories of Overhead costs like administrative, operational, etc.
All organizations pay overhead, regardless of what, if any, profits are made. These are ‘assumed’ costs of owning a business. Costs without which a business cannot sustain or survive. So while we are so ‘mechanical’ with our expenses, what about the efforts?
Entrepreneurs know all too well that starting out and building a business requires not only a financial but a commitment with time. The emphasis is so extensively and exclusively placed on the financial nose-dive with entrepreneurship, that most entrepreneurs go in with the blind-spot on time commitments. Before realization comes strolling into the hallways of an over committed and exhausted brain, work culture is well on its way to being cemented for the near future. And now, under the perilous and tumultuous ticking of the overtime clock, an entrepreneur is left with a sub-standard efficiency. And if there are other commitments that tug at the entrepreneur like spouse, kids, community, etc then regret starts to creep in.
So how can entrepreneurs become more efficient? Why does the business plan not account for Overhead efforts? Why do so many entrepreneurs experience a burnout? Why is time management a skill not tackled from the beginning of business ownership? Why does it not face the same emphasis as the core values of business ownership? How does disheveled time management impact work culture?
What are Overhead Efforts? Much like the concept of Overhead Costs – Overhead Efforts, we define, as efforts that are required on an entrepreneurs’ part (or their teams) that are essential to building and sustaining a business. These efforts are clockwork actions that must be executed to keep the gears turning.
A business plan helps you guide your business throughout the life of the business itself. It becomes the structural framework! Consider including the component of the bare minimum time commitment you are willing and ready to allocate. ‘Willing’? ‘Ready’? If you’re thinking, this is my business and about to be my bread and butter and become the source of my financial freedom and I am not to just put all of my time in? Of course you can! But it will help to be a good manager of your time when you are just getting the gears to turn with a business launch.
So whether you are a lone ranger or if you are going in with partnerships or if you are ready to enter the battlefield with hired employees that believe in your vision and mission, it is important to understand the concept that Time is money and vice versa! Being wise and prudent with spending either or both of those assets is worth becoming!
Here are some things to consider for your Overhead efforts!
Understanding your mission and passion
What is your mission? Be the missionary! Most entrepreneurs start a business because they have a mission to meet a need they see in the world. Understand your mission and make sure you schedule a routine to be the missionary – living out your mission and do what you love to do. The passion that drove you to start the business is the main fuel that will keep it going. So knowing why and what it is you love to do is critically important. If you have a sandwich shop and you love making sandwiches then make sure you have time to do that. If you love creating videos and podcasts, make sure you do that! It is very important that you allot time for yourself to do what you love – related to the business. Keep your hands and feet wet!
Not sure how you can do that now that you have established a culture – contact us and our business coaches will guide you and help you navigate this.
Delegating or Outsourcing
In order for you to have time to do what you love you will have to say ‘NO’ to your internal world! Go getters and highly driven individuals are bound to push themselves to do every task and do it with excellence. Boundaries within the internal world riddled with self-dependency and pride can bring healthy and positive outcomes that will dodge the onslaught of burn-outs. A business coach or a life coach can help you navigate this. Find people that are passionate about some key operations that are essential for your business. You can also outsource your operations procedures from other organizations. For instance, if filing taxes are not your strong skillset then pay a company or book-keeper to do this for you. The concept of ‘White-labeling’ is worth exploring when possible.
Working your business plan
It is important to include time commitments that you plan to have for your business. If you are starting a business while working at a job then make sure you think about how you plan on increasing your time commitment once you have left your job to solely focus on the business.
Audits
Commit to auditing your business regularly. This is a proactive approach to ensuring there are no surprises. Having a checklist of things to check regularly allows you to ensure you have checked all that requires your attention.
Employee connections
It is critical that you put emphasis on building connections with all that you work with. Whether it is team building activities or retreats. It is ok to incorporate meetings to cover important changes but the primary emphasis for these events must be that they are to appreciate the team and foster connection. Schedule these regularly at whatever intervals you deem appropriate. Business coaches can offer ideas and suggestions for corporate events.
Ultimately, time and money are both resources we need to be wise with. Overhead costs may be inevitable but how you implement the necessary overhead efforts will determine the sustainability of your mission, your vision, and your passion!
