Cash flow is the oxygen of your business. Have enough of it and you will rock all through the day, but a lack of it will wake all through the night. Cash flow keeps the dream alive.
Yet there are only two ways to get more cash flow: sell more or cut back.
There are no shortage of great articles on this site that can help you learn how to sell more, which makes sense because marketing, advertising, social networking and the like are fun and interesting. But cutting back? No one likes that idea.
As my sweet ‘ol mom used to say, sometimes you have to do things you don’t want to do. So here are some creative, and mostly painless, ways to cut your overhead and increase your cash flow in the process:
1. Radically re-think your physical office structure: Rent and labor are two of the highest overhead items for many small businesses. Let’s deal with the former first.
If you rent an office and only use it, say, eight hours a day, five days a week, you are paying a lot of money for unused time. Here are five better options:
- Sublease: Rent that extra space, or unused time, to a copasetic business or individual. In the old law firm where I used to slave away, three different solo practitioners rented office space and secretary time from the firm. The firm thus brilliantly turned an empty office liability into a profit-making asset.
- Shut it down: One very savvy business guy I know recently realized that that in this e-world, he didn’t really need an office at all anymore; that it was an old-fashioned idea, what with his staff coming and going and working at home and on the road. So he closed shop and saved almost $2,000 a month in rent, yet they still mostly work the same, only from home. The team phones, texts and emails each other all day. They meet via WebEx when needed, and have a physical staff meeting at a restaurant once a week. And he doesn’t miss the expense at all, needless to say.
- Use an executive suite: Executive suites are fully equipped offices that you can rent by the hour, week, or month. You only pay for the time you use. That alone is cheaper for many businesspeople. Some small businesses have cheap offices or work from home, and use executive suites when impressing that big client is necessary.
- Renegotiate: There is a glut of commercial space in many cities these days and you can use that to your advantage. Ask your landlord for a new, better deal. If she says yes, great, and if she says no, then…
- Find cheaper digs: There is a glut of commercial space in many cities these days and use that to your advantage.
6. Free yourself: Updating software across the firm can be an expensive proposition, but the plethora of open-sourced and other free forms of software today gives you options you did not have before. For example, Google Docs can be a fine, free alternative to Word.
7. Renegotiate your deals: Just like you and me, your suppliers and wholesalers need business. Rather than lose yours, they just may be willing to give you a better deal on certain items, or throw in some sort of extra value to keep you happy. You do it for your best customers, right? Well then.
If this doesn’t work, then…
8. Go shopping: There are plenty of businesses out there that want your business. If you start to shop your wholesale needs, or your insurance or phone needs, you can almost assuredly find some arrangements out there that beat what you have now.
9. Go independent: No, I don’t like giving some of this advice, but as a wise old woman once said to me, sometimes you gotta do things you don’t want to do, right? So here goes: Having employees is expensive. If you can replace a few with independent contractors, you will save money and overhead.
10. Green it up: While going Green is fashionable, and of course a good thing to do in its own right, let’s not lose sight of the fact that it also can save you a lot of dough. Shred those documents and it for packing and shipping. Turn old folders inside out. Turn off the lights. Don’t print, send an email instead. When printing, print on two sides.
11. Stop traveling: Meet by videoconference.
12. Buy used equipment: Used office furniture can be found for a song and often in very good condition. Craigslist is a font for that, as well as sorts of used business equipment.
Now that wasn’t so hard, was it?
Follow me on Twitter @SteveStrauss.