Spend Less. Make More. Prosper. (+ Happy Valentines Day)

What if your bank account was at $0? What would you do then? As an entrepreneur, this is a real possibility. For those of us lucky enough to have a steady cash flow it is not a concern. Or is it?

Today my challenge to you is to rethink the money coming in and out of your business. It is easy to forget the little things that can make all the difference. All the expenses and money used on things that are not really necessary.

There are ways to slim down your output and beef up your input. When you can accomplish this your business can grow faster and prosper.

Spend Less.

Spending less money is one of the biggest challenges you will face in business. You should constantly be challenging yourself to create minimal output while not hurting the growth of your business.

This can be accomplished in a lot of ways. Here are some quick tips on how to do it.

1. Rethink the office. Do you really need an office? Is it screwing up your creative flow if you have one? Rented or bought office space is the most conventional but also the most expensive physical space to run your business. You can read my tips on rethinking the office here.
2. Changing marketing. Like office space, advertising is a money killer in business. It is also one of the least effective ways to reach customers. People see way too many advertisements a day to register almost any of them. However if you can reach your customers by creating an identity for yourself and getting others to talk about you, you will be much more prosperous. I will write on this more in the future but basically think: Referrals, press, viral. It is free, wide spread and more effective. People trust others more than they will trust you at first.
3. Lessen Travel. There are plenty of ways to diminish your travel expenses. Set up a model where your communications can mainly be done over the phone or by internet. Use free tools online to help (see #4). Besides a preliminary meeting, it is not really necessary to meet in person. When you do not meet as much in person with someone, you can cut back on gas expenses, food, and beverages.
4. Free Services. There are many alternatives to the paid services. Many of them you can utilize the same. Think Google Docs (if you are not too afraid of Google taking over the world), Skype, email campaigns (as opposed to snail mail), etc.
5. Take out office supplies. There are a lot of alternative services that are provided by this thing called the internet. (Heard of it?) Convert printed memos, bills, etc. will make things more cost effective, simple, and environmentally friendly.
6. Buy used. Why do you need new stuff? Because it is shinier? A used book or a refurbished MacBook will do you the exact same service for less cost. It seems so obvious but many of us really like shiny things. Get past that enigma and buy wisely.
7. Automate. Automation is important—especially for small firms. By automating processes you are using far less man hours and hence, saving time and money. Remember that in business time truly is money.
8. Take less money out. Personal spending can really damper your business, especially if you are a small business and/or in the beginning stages. If you can lessen your personal spending you will be able to keep more money into the business to grow.
9. Outsource. Instead of having employees or doing the work yourself, outsource parts of your work. Free agents do the same work but they bid on it so you end up spending less and there are no tax forms or supplying office space for them. This is definitely something I want to get into more detail in and will talk about in a post soon to come.

Make More.

A goal in business is to continually increase your income. There are many ways of doing this and I have mentioned a few in the past. Here are some new ones that are very powerful and I use myself.

1. Ask for deposits. Money now is worth more than money later. It is ok to ask clients for part of the money up front. This shows they are good for the money and gets cash in your pocket quicker.
2. Create Meaning. I talk about this here and if you don’t believe me, Guy Kawasaki, O.G. (Original Gangster) of Apple Computers, and Top Business Writer talks about it in his book, The Art of the Start.
3. Create Identity. Identity is different than creating meaning. As humans have an identity, so should businesses. It is a way to show who you are as a firm that will make your customers more comfortable with you. It adds that human touch.
4. Charge more money. I have touched on this in a couple articles I plan to write more on this in the future. The key though is asking yourself what you are really worth. Is your time worth more? Should you even charge for your time? Why not charge for outcome? They don’t know or care how long it takes you. Why not charge a price for the value of the outcome?
5. Ask for referrals. Referrals are one of the best ways to generate new business. Don’t hesitate to ask clients for referrals so you can diversify your client portfolio and add income.
6. Add new services / products. An important part of growth is adding new services or products to your business. When you add new services / products you can widen the range of your income possibilities.
7. Update services / products. Be sure to keep on top of the services and products you already offer so they are up to date and appeasing to the largest market possible.
8. Offer current clients more services. I do websites for my clients. Do I really want our relationship to end on the launch date? No. Of course not. If someone uses your services, they are far more likely to use you for other services.
9. Add new markets. You’ve got a market you are working with and you are good at it but a market can only go so far. Spread your potential profit by spreading the type of people you serve. Do some homework, find a new promising market, and move up to the next level.
10. Create new income streams. Besides just adding new services or products, you can do something related but not within the confines of your business model. For instance I run a design business but also I write about business lifestyle on the side. This adds extra income into my pocket. Think about your skill set. What else could you do with it that would be easy extra income?
    
11. Earn by saving. If you follow these tips and come up with your own, you might have some extra cash handy. What to do with that money? Don’t let it sit in a saving account earning .31% yearly. Invest it into a high interest saving account.

What do you do to increase your input and diminish your output?

+++

P.S. Happy Valentines day to everyone! Our better halves put up with our late night working binges, drifting mind in a sea of business ideas, and generic rambling about things that are not as exciting to them.

Today is a great excuse to change that. Do something to show them they are number one to you above your business (even if the competition is close).

If you liked this post be sure to share it on StumbleUpon. Also, subscribe to Zen Problog for more articles on Finance and Professional Lifestyle.

Photo by kissthi