1. Group your overhead costs

Put your overhead costs in groups and monitor trends. By way of example, we'll look at8 cost groups: staff, premises, sales & marketing, operations, travel, professional fees, administration and finance.

2. Review costs annually

Analyse each group in detail at least once a year. Don't do this all at once because it is big a job and may create more actions than you can manage. Measure costs year-on-year and as a percentage of sales. Are they up or down; if so do you know why?

3. Staff costs

Staff are a cost: are they all delivering value? Do you know what they do all day? Some functions may need reviewing. Look at overtime and pension costs and keep abreast of employment law changes.

4. Costs of premises

Is a rent review due? Are the rates too high? When did you last review energy contracts? Are you and your staff conserving energy and reducing costs?

5. Sales and marketing costs

Do you know which customers and products make you most money? Are your sales and marketing activities focused on these? Which marketing activities generate new prospects? Can you streamline the sales process (e.g. with online processes) to save costs?

6. Operational costs

There may be lots of small costs in production or service delivery which do not fit into other categories. Watch these or they will mount up and reduce profits.

7.Travel costs

Which costs/journeys are essential to your business? Consider opportunities for increasing financial leverage on car leasing or purchase, fuel, insurance and breakdown cover costs through association schemes.

8. Professional fees

You may need external specialists such as accountants and lawyers, but make sure you agree measurable performance and get value for money.

9. Administration costs

Check all direct debits and standing orders. Are they still valid or are you paying for something you are no longer using or need?

10. Cost of finance

Challenge your lenders for better deals. Reduce bank charges using electronic banking. Manage your cash flow to reduce interest costs and/or earn interest.

Finally, remember that you work hard to earn your profits, so do not give them away!