When it comes to launching your business, your most critical resources are time and money. Any book on launching a business will outline the need for long term saving – making sure you have money to live on and to cover expenses for at least the first year of being your own boss. If you are in the phase where you are saving money to fund your transition, here are some tips that you can start today. Implementing a few of these ideas can build a reserve that can be used to invest in your business or add to your savings account.
1. Hire Your Kids. If you own your own business, you can hire your family members – including young children – at a “normal” wage. And not only is their pay tax-deductible for you, you can also count their wages against many costs associated with their care and upbringing. Sound too good to be true? Make sure to check it out first – tax laws change frequently, but it’s worth looking into.
2. Get Your Full Tax Write-Offs. Speaking of taxes, are you writing off everything that’s associated with your home-based business? Are you remembering to include office space, cleaning, utilities, phone lines, computers, office supplies, training, and education, just to name a few? Depending on your industry, your write-offs can even include things like your car, dining out, travel, books, and more. Check with your accountant or tax preparer for more information.
3. Be Conservative on Technology Investments. With new techno-gadgets coming out daily, we can feel like we need the latest iPhone, iPad, computer, laptop, speakers, microphone, and carrying bag to drag all of it around in. But do you really? In most cases, we give up on our technology before IT gives up on us. Before investing in the latest whiz-bang computer or gizmo, take a look at your current set-up. Do you need a cell phone that records HD video? Sure, it’s tax-deductible, but not at 100 percent; there’s still an out-of-pocket investment, and that’s what we want to limit. An extended warranty on your gadgets may sound like a good idea, remember; they wouldn’t be pushing it so hard if it weren’t making them money. The truth is, if a manufacturer doesn’t stand behind their product, believe in their product, without charging you for a warranty, you may want to look into buying a different product.
4. Go for Non-Print Advertising. When was the last time you picked up the phone book and let your fingers do the walking through the Yellow Pages to look for a business or phone number? Wait, do you even have a phone book right now? It’s much more likely that you turn to your computer for information.
For most businesses, print advertising is a thing of the past. The hundreds you spend on Yellow Pages and print ads in the newspaper can be pocketed instead of thrown away. Instead, turn your dollars – and your efforts – towards online and offline networking. For the price of one print ad, you can sponsor a MeetUp.com group or event, host a Chamber of Commerce mixer, or give away some awesome prizes to an online contest in your niche.
5. Barter for Business. Swapping isn’t just for flea markets! Trade your internet marketing know-how for your CPA’s tax-prep services, or offer your top-notch editing services in exchange for printing at the local copy shop. Many local business organizations and Chambers of Commerce have directories of members open to swapping. Check your own community’s business organizations and I bet you will find a swapping network to join.
6. Raise your Deductible. Call your insurance agent (car, house, and health) and raise your deductibles. Just raising your car deductible from $250 to $500 can save you hundreds of dollars per year on your insurance. And while you have them on the phone, ask about safe drivers’ discounts, good health discounts, and gym discounts. Yes, some insurance plans offer discounts at workout facilities, and some may even give you a reduction in the cost of premiums for those who work out regularly.
7. Question Every Expense. We often think we just can’t live without that unlimited Netflix account, or the gym membership, or the kids’ babysitting or daycare. But instead of taking everything as a given, go through your bills one by one and see what you could do if you HAD to cut your spending in half. Most people won’t be faced with that kind of drastic reduction in income, but many Americans are dealing with that very scenario right now.
Saving money is as much a mindset as it is a set of specific actions. Once you start “thinking lean,” you’ll see many opportunities to get creative and cut your expenditures.