Is your money going down the drain? If you are a small business, especially if you are a start-up small business, your cash flow can make or break your success. The problem is where do you spend your cash? With a finite amount of money available, this becomes a big decision and one that most small businesses struggle with. The question is, where is your money drain? and where should you be putting your money?
Technology is one of the easiest money drains and my personal favorite. I have to keep myself on a short leash when it comes to technology. No surprise I am a tech junkie. But I am sure many of you are as well. When we are getting started it is easy to say I need the following 10 pieces of equipment to get my business going. I need 2 computers, an iPad, a printer, a fax machine, a smart phone, etc. We have a picture in our mind of what operating our business looks like and it is easy to get into the trap of “I can’t operate without…” But the reality is we tend to shoot big instead of looking at what can your business operate on NOW vs. what will your business operate on in the future.
You don’t need 2 computers and and iPad and a fax machine and a printer and and and. Boil it down the the very basics. Find alternate solutions to your tech/equipment needs.
Alternate (online) solutions:
- efax.com: allows you to fax (send and receive) online. You even get your own fax number.
- Skype: With skype you can make phone calls on your computer. This is a great replacement to a office phone. Save yourself the cost of a monthly phone line and just get a skype number. People can call you, leave messages, and you can even use it on your smart phone.
- Dropbox or Soonr: Don’t go out and buy a big fancy external hard drive. If you use a service like Dropbox or Soonr you can not only back up your important files, but you can access them from any computer with internet access or even your smart phone.
- Logmein.com: Need something from your computer? Logmein is one of many services that will let you remote access your computer. This means you can go to any computer, log in, and use your home/office computer remotely to do anything from run software to download files.
Alternate (offline) solutions:
- Personal Computer: Use your personal computer until you can afford to buy a new computer just for your business.
- Mobile phone as your office phone. You don’t really need multiple phone numbers. Use 1 phone for all your needs and cut down on your operational overhead. If you really need a fax and office number, use a service like Efax and Skype.
- iPad vs. Notepad: By notepad, I don’t mean a notebook computer or an iPad alternative. I mean a pad of paper. Of course a pad of paper does not meet all of our iPad needs, but if you are using it to take notes, write blogs, jot down business ideas or write your to-do lists then a pad of paper will suffice. Once your cash flow improves, you can buy the fancy tablet and play angry birds while you take notes and do quick photo editing for your next blog post.
- Save as PDF: Ask yourself, do you really need a print out of that receipt or do you just need a record? I have found that saving a website, receipt or document as a pdf to keep for your records is just as good (if not better) than having a print out. For one, you are more green by printing less and two, if you only need a record then why not keep that record on your computer rather than in a filing cabinet.
- Filing cabinet vs. digital records: I personally hate filing cabinets. I also hate filing. That being said, we still need to keep records and therefore need files. Instead of buying lots of expensive filing cabinets that take up valuable space, get as much as you can via digital records like online statements. If you have receipts, you can scan them and create digital files (one small scanner can be as cheap as one filing cabinet). By keeping your files digital, you not only save space and tree’s but you also have a safer filing system because it is backed up digitally and safe from accidents that can befall paper (ie. fire, flood, shredders).
- Home Office: A lot of people like to get an office so they can present themselves as professional. Ask yourself if you really need an office or just an office space. If you meet with customers, consider going to them instead of asking them to come to you. You can save a lot of money every month by setting up a home office instead of renting office space. Plus, it is really nice to work from home instead of doing the morning commute (well, it is my preference).
- Business Apparel: Looking the part is important, however it is easy to go over board. Lets face it, we all like to go shopping for great clothes and the corresponding accoutrements (ok, most of us). Realistically we don’t need much to look the part. You don’t need 5 power suites and a fancy leather briefcase and an expensive watch and a classic pearl necklace or cufflinks. To start, instead of buying a lot of different outfits, buy one but make it versatile. So get one pair of slacks and a few shirts. Get a couple different pieces of jewelry or ties, so that way you can change up the look. But instead of spending thousands on multiple outfits. Take one outfit and turn it into 5.
So let’s look at the numbers. How much money are you actually saving in the first year?
efax: $14.13/mo (169.56/yr)
fax machine: ($50)
Phone line: $35/mo. ($420/yr)
Skype 4.99/mo (59.88)
Phone line: $35/mo. ($420/yr)
External Hardrive: $100
Personal Computer (already have)
New Computer $1000
Notepad $1 iPad: $500
PDF: free Printer $35
Digital File: free
Filing Cabinet $40
Home Office: free
Rent an Office $500/mo ($6000/yr)
Business Clothes: Pants: $150; 5 Shirts $200; Jacket $200; Business Clothes: 5 suites; $1250 (5@ $250)
Total Alternate Solutions: $780
Total Expensive Solutions: $9765
Total Savings: $8985
Not everyone will need all of the things listed above, however this gives you an idea of what you can save with just a little create problem solving. When you are getting started it is important to save your pennies so you can invest them in things like marketing and business development.
Don’t your business expenses be a hole in your financial bucket.