with Aliza Sherman
If you own a business - home-based or otherwise - this is the blog where you'll find practical tips and smart ideas about entrepreneurship. I've started and run 4 different businesses so "been there, done that." I'll also invite successful entrepreneurs to share their best advice with you.
To learn more about Aliza, check out her profile on Work It, Mom! and her website, www.mediaegg.com.
We’re in an economic crisis. Yes, I’ve heard that and felt that, and I know how it affects me and my family personally. But thinking about my company, I realized I had to rework the way I think about business spending. Here are a few things I’ve decided in order to keep more cash flowing in than out, even as the flow in slows down while everyone is tightening their belts.
1. Rethink company expenditures. I used to never think twice about putting a lunch on the company card or picking up a piece of equipment or a peripheral on the company’s dime. Instead of simply using the company card for company expenses, we’ve switched teh process so now we use our personal money for business expenses and then submit an invoice. Suddenly, what seemed easy and painless has become something that I think twice about before spending. By making your team - and yourself - dig into your own pockets for smaller expenditures and then submit receipts for reimbursement, everyone gets a quick dose of reality in terms of how they are spending. We still put larger travel expenses on the card.
2. Reassess your monthly auto-pays. Like us, you probably have at least half a dozen products and services that you’ve put on autopay and basically take for granted that money is being sucked out of the company on a regular basis so you can use those tools. Our autopays include 5pm for project management, eFax for Web-based faxing and LibSyn for podcast hosting. We recently cut monthly expenses by shifting from Freshbooks back to Quickbooks Pro (at the behest of our bookkeeper). But we had to add more expense to upgrade our 5pm account to accommodate more team members. Just make sure that you list out your auto-pays, and make sure you have the exact service plan that you need. In some cases, you can downgrade and save some money.
3. Hold off on most purchases. While we could all benefit from buying an updated version of Microsoft Word (I’m working off a 6-year-old version on my 6-year-old PowerBook that is holding onto life by a thread), we’re waiting a few more months before purchasing it and some other pricey software. I do have a newer MacBook but none of the latest software on it. I’d love an even newer, lighter-weight and faster computer but that has been put on the back burner. Weigh out productivity costs when looking at big expenditures. If you can point to real savings by making a big purchase, then go for it. But you really have to look closely at when you will actually start saving.
4. Go free where you can. When I was equipping my MacBook with all the software I needed, I went for the free open source solutions such as NeoOffice to stand in for the Microsoft suite of office tools. 99% of the time it serves me well, but it is becoming the 1% of the time that can be a real stickler in productivity. Still, go free when and where you can. Got a PC and want to avoid Microsoft? Try OpenOffice. Need PhotoShop-like functions? Try G.I.M.P. There are many open source options out there for just about any software or service you need - just do a Google search. Make sure you have at least the minimum functionality that you know you need or free will end up costing you more in the long run.
5. Justify your travel. I am traveling more and more for business but now look at each trip through the lens of “how can I make money for the company while on this trip?” This could be a short term hit like speaking engagement honorariums or a longer term infusion like a warm lead to a new client or meeting face-to-face with a potential strategic partner who can bring you in on new projects. I’m going to Izeafest in Orlando and Dreamforce in San Francisco and was able to get legitimate writing assignments for both that will help me offset the travel expenses. Not everyone is a published freelance writer, but if you have a popular, high-trafficked blog, you may be able to get into an event as media for free or at least get a nice discounted pass from the event host.
Tightening your company’s belt should not mean loss of productivity. It simply means thinking twice - or even three times - before whipping out the company credit card to pay for something.
How are you tightening your company’s belt these days?
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