It’s personal: Trim personal expenses and boost your business
Whether you’re just launching a new business venture or need to inject capital into your existing business, you need to find new sources of funding. You obviously can’t keep reaching into your own pockets. As the saying goes, “Money doesn’t grow on trees.”
You can, however, discover ways to trim your own expenses to bootstrap your business or simply to increase your cash flow, funneling those savings back into the business. Think of it as found money. Self funding is an entrepreneur’s best tool. Here are a few areas where it’s easy to realize cost savings:
Food
Let’s start with the basics. If you own your own business, you’re likely a member of a bulk shopping club. Take advantage of your membership and buy staples for your personal use as well. Just be sure, as your accountant will advise you, to keep those purchases separate.
Speaking of food, why not bring your lunch to the office? Unless you’ve got a business lunch that you can write off, brown-bag it. It’s not only cheaper, but most likely healthier, too.
And if you’re one of those who stop at the coffee shop every morning for a jolt of java, either make it at home and fill your travel mug or wait until you get to the office. Remember, every penny counts.
Insurance
Face it; insurance is a major expense, especially if you’re a business owner. As with any expense, it pays to shop around. But be sure to compare apples to apples; make sure you’ve got a list of exactly what’s covered in each policy. Let’s start with business insurance. Here’s one resource where you can compare insurance quotes for small business. When it comes to health insurance, check out government health insurance plans as one option. Then there’s auto insurance. You can compare rates for personal auto insurance and decide whether to cut back on coverage or switch providers.
Clothing
It’s back to basics again. If you’re in the roll-your-sleeves-up mode, you don’t need designer duds. Unless you’re meeting with clients, prospects or investors, keep it simple. There’s no reason to pay for dry cleaning on a weekly basis. And if you do need a new suit, consider going to a high-end consignment shop. If you need a tux or evening gown for a special event, decide whether renting would be more cost effective than buying.
Entertainment
An old funding adage is, if you’re not making money, you’re spending money. For many entrepreneurs, cutting the cord is crucial. That’s right, say goodbye to cable TV. After all, how much time do you actually have to watch TV? You’re probably burning the candle at both ends, so why burn money on cable? There are other options available to consider. While you’re at it, take a look at all your subscriptions — publications, shopping, whatever. Be ruthless in determining what’s necessary and what’s not.
Finances
Revisit your credit cards and checking accounts. If you’re paying annual fees, it might be time to pull the plug. Also, it may seem obvious but resist the urge to max out your credit cards unless you can pay them off in full. Avoid interest charges and late fees at all costs (pun intended). Look for interest-bearing accounts or credit cards that offer some type of reward, whether it’s cash back, travel credits, bonus points, etc. If you’re already investing your money, revisit your portfolio; you may want to pull back on the riskier stocks.
Freebies
From online courses to business forms, web designs and more, there are plenty of free resources out there. Just beware that you get what you pay for, so do your research first. And don’t be afraid to ask for handouts, so to speak. Other businesses that are in a growth stage may offer services or upgrades for free in order to build a client base. Consider barter as well. You may be able to trade services; that way, there’s no capital outlay for either party.
Another way to create more revenue is to do so outside your business. While you’re certainly strapped for time, think about offering your business expertise as a consultant, particularly for other entrepreneurs. After all, you’ve “been there, done that.” It’s a win-win situation. You’ll be helping other businesspeople, and you can charge a hefty hourly fee and use those funds to foster your own business growth. On the flip side, if you’re seeking business advice, check out SCORE for free advice from retired business experts.
You’d be surprised how saving a little here and there can add up. If you’re looking to make small improvements in your business, short of taking out a business loan and incurring more debt, start tightening your belt. Remember, you don’t have to drastically alter your lifestyle; you simply need to spend smarter. You’ll be reaping the self funding benefits in no time.