I just returned from a great local conference where about 300 small business owners and entrepreneurs got to mingle with the banks in our area and learn about how to find money to fund their businesses. Out of those 300, about 5 received $5,000 loans on the spot. Everyone was able to apply on site. I think that’s great. Most people need some startup cash to get their business off the ground and cover their overhead. $5,000 is fairly manageable. Of course, those 5 obviously had excellent credit. It’s not like a few years ago, when it was easy to suddenly find $10,000 + worth of credit added to your Visa or MC. Too many people either funded their businesses with credit cards or the equity in their house. I admit I was guilty. How about you?
Cutting your operating costs, or overhead, is something that many of us former financial idiots, are doing these days. It eases the stress and suddenly you start seeing black on your P & L instead of red. What a concept! I just can’t imagine what it must be like trying to be a small business owner with a storefront these days. That’s why many of our favorite Mom and Pop outfits are fading away. It’s sad, but instead of overspending on rent for a store, why not use your savings to enrich your lifestyle.
I just moved. OK, I downsized. My kids are now out of the house. My man friend retired (and is bent on puttering, instead of working) We both want to travel more. I certainly didn’t need the behemoth of a house I had in LA. I’m in a much smaller but easier to maintain home now. I cleaned it up just last week and it only took me about an hour, as opposed to 4 hours. The housekeeper was also part of the overhead that got cut.
I previously worked in direct sales, which generally has less overhead than most businesses. I enjoyed it, and it was a company of very high integrity, but I finally realized I was spending more money than I was making to run it. Unless you are building your team, which I did quite successfully for several years, that monthly fee or ordering products and supplies can put you in debt. Add on the conferences, meetings, sales supplies, networking events, etc.
I was very sad for some of my friends the other day They had joined what seemed to be an exciting opprotunity. The products were amazing, but, I cringed at how much each item cost, especially since the same items were being sold on Ebay for much less. I signed up at first out of curiosity, but soon got turned off by not only the cost but also because they seemed a bit disorganized. The company finally ended up closing up its offices in the US last week, leaving thousands of people, who had spent a ton of money stranded and on their butts. The former leaders were attempting to move everyone into another opportunity. It was getting ugly. No thanks.
At the conference I attended today, financial experts emphasized that businesses generally fail because of poor money management. That’s so true. You may think you are highly successful until you actually look at your profit and loss statement. That is not success and it is not fun. A person in the same business, who is keeping things much more simple, may not be at as high of a level, but is, in reality, more successful because they are seeing a profit.
For me, reducing my overhead and finding a business that fit my lifestyle and was my own, has made my life much more enjoyable. Not only have I cut costs significantly, but I’m getting great referrals from happy customers. I help business owners with WordPress blogs and it is a service that has proven to be needed by many entrepreneurs, especially those on a budget. My overhead is very low and I get to work on amazing projects.
I doesn’t matter what you decide is right for you, if you keep it simple and cut the fat, you will be happy and have fun doing it.
If you are younger and have the stomach to take more risks, definitely go for it, but make sure you are managing your money correctly.
For those with an existing business, give it a hard assessment by a qualified CPA. Then, make adjustments to reduce your overhead. One of the sponsors of the event I attended has a business called CPA Moms. Check them out HERE. (this is not an affiliate link, by the way, I was just extremely impressed by them) They will do bookkeeping for you at a very reasonable rate and are all highly qualified and screened CPA’s. CPA Moms has created a unique online business model as well. Because the “Moms” do not want to work in an office full time, their rates are very affordable.
Get real about how you are spending money to run your business and have much more fun with it. What are you going to cut today? Please leave a comment and tweet/share this post.
About Rebecca Olkowski
I'm a 30 + year voice over actor, blogger, WordPress Blog Consultant and a gal who loves to have fun. I'm on a mission to travel the world in style. Can you give me a lift?
