Let’s face it, cash flow is the lifeblood of your business. The abundance of it keeps you rocking all through the day, and a lack of it keeps you waking all through the night. And that means that especially these days, plenty of small business people are not getting enough sleep, eh?
So how do you increase your cash flow? Essentially, you have two options: Increase sales or reduce overhead.
Let’s take a look at the latter since it can often lead to more immediate results. Here are some smart and easy ways to keep your overhead low:
- Change your office structure: If you do not use your office 8/5 (eight hours a day, five days a week), or if it’s just too expensive, then you have a few choices for reducing your rent:
- Sublease: Consider renting unused portions of your office, or unused days even, to a like-minded businessperson.
- Get an executive suite: What about ditching the office altogether, moving the business home, and using an executive suite for important client meetings? That could save you a ton of cash.
- Renegotiate: Commercial rental spaces have high vacancy rates these days. That means that you may be able to negotiate a better deal with your landlord. If not, then . . .
- Find cheaper digs.
- Create a virtual office: I have a pal who sent all eight of his employees home two years ago. They meet online once a week using services like WebEx, chat on the phone, text, and email. They hardly miss the old office and he certainly does not miss the old rent.
- Go green: Yes, greening your office is all the rage and it’s good for the environment, but guess what? It’s often good for the bottom line too. Think about it: Recycling packaging materials is both green, and chincy. Good job! Turning old file folders inside out is recycling at its best and a fine ways to save a little money. Turning off the lights when you leave or turning used white paper into note pads both allow you to do right and do well at the same time.
- Look for better deals: As with your current landlord, consider striking new and better deals with your current suppliers. If they won’t bite, look for new, less expensive suppliers. People are hungry for business right now and you should use that to your advantage.
- Go free: There are free, or practically free, alternatives to many of the normal ways of doing business. Example: Using Google Docs instead of buying that expensive new Microsoft Office suite. What about using other open source software solutions?
- Sue it yourself: Don’t hire a lawyer, instead draft documents yourself using a tool like Nolo.com.
- Reduce your labor costs: Hire independent contractors instead of full-time employees.
- Buy used equipment, or lease even: As with a used car versus a new car, you can still get plenty of bang for your buck when buying used office furniture and equipment. Similarly, leasing it can be cheaper than buying new.
These are just a few ideas. Look around the office, I’m sure there are plenty more. Your bank account will thank you.
Peter Sinenko - Born in Kiev in Ukraine, previously worked as a supply manager at the Zirka Factory. Peter is now officially retired and is happy to share his experience with the readers of Bank Login Lab.