Particularly when discussing the finances of a nonprofit, administrative overhead comes into the conversation. Donors want to know exactly how much of every dollar is going to the cause and how much is going to manage the organization. Private sector companies also need to keep an eye on this aspect of business because while infrastructure is important, every business needs to maximize efficiency in order to affect the bottom line.
So how do you keep that administrative overhead low? There are a few things to keep in mind when evaluating and cutting some of these costs:
While not every industry can have employees work from home, it is a good idea when possible. The same work can get done with fewer people in the office, enabling you to decrease office space and reduce utility (i.e. phone, bandwidth, electricity) consumption. This can do a lot to cut the overhead.
Consider Job Options
One of the largest pieces of the budget is paying for employee salary and benefits. Whenever you are hiring, take time to construct the position requirements carefully so that you can find the right person and get as much value as possible per employee. Also, consider temps or consultants as full-time employee alternatives without as much overhead.
It’s hard to minimize administrative overhead if you don’t know where the black holes of time management exist. By setting up a convenient way for employees to track their time, you can see where in the process things need to be more streamlined.