In the excitement of starting up, it can be tempting to invest in things you don’t really need. When was the last time you took a step back, examined your business expenses and figured out where your money could best be used?
We asked eight entrepreneurs from Young Entrepreneur Council (YEC) the following question:
“What’s one business expense that your company decided to stop paying for recently and why?”
Here’s what YEC community members had to say:
1. Professional Organization Fees
“In 2013, I joined several professional networking groups and organizations. The most valuable organizations are the ones that provide opportunities to meet like-minded entrepreneurs with whom I have a lot in common. Membership fees add up (some organizations charge thousands of dollars each year), so I only renewed memberships with the groups where I was most engaged and have the best networking experiences.” ~ Brittany Hodak, ZinePak
2. Custom T-Shirts
“What a waste — it’s something that you always do when starting out your company. But you or people who work for your company are probably the only ones who enjoy wearing them. We used to shell out thousands of dollars on these things. Instead, we use that budget to give out massages to our employees. Nothing travels faster than news from an employee who’s just gotten a massage. They’ll show everyone how much they love their job.” ~ John Rampton, Adogy
“There are so many great domestic and foreign specialized service providers. The service provider is an expert in a specific skill. You can reduce the number of employees and the hassles they bring. It’s almost always less cost as well because you’re paying a flat fee versus the employees’ salary and all the government taxes. Better result for less cost.” ~ Joshua Lee, StandOut Authority
4. Our Fax Machine
“Every dollar counts. We realized we were very rarely using our company fax machine and paying for a dedicated line was a waste of money. With a scanner and an online faxing service, this expense can be eliminated entirely.” ~ Josh Weiss, Bluegala
5. Media Subscriptions
“We recently cut back on some extra social media and paid media subscriptions. There are so many great free platforms we can be taking advantage of instead. ” ~ Amanda L. Barbara, Pubslush
6. Office Space
“We’ve been testing the waters for years by letting employees work remotely. We use programs like Basecamp to manage our projects and keep transparency on what each employee is working on, and Skype to stay connected to one another. Being a small, tight-knit organization has worked in our favor and is one of the main reasons this arrangement is able to work smoothly.” ~ Brooke Bergman, Allied Business Network Inc.
7. Our PR Agency
“We worked with a PR agency for a long time that charged us a lot of money every month. As of June 2014, we stopped working with them. I realized that PR is something I can do myself, and so far, I have been very successful at it.” ~ Vladimir Gendelman, Company Folders, Inc
8. Business Cards
“When you can exchange information using your smartphone, why do you need to cut down more trees and have 5,000 spare business cards sitting on your desk because you got hooked into a “special discount” on Vistaprint or Moo.com? Saving on business cards that serve little utility allows us to spend more money on neat perks around the office that our team members actually value.” ~ Firas Kittaneh, Amerisleep
Bills Photo via Shutterstock
#1, #4 and #8 I agree with wholeheartedly. As for the employees…I’m not as convinced. As usual, it depends on what you need and the truth probably lies in the balance.
I think with business cards, it might depend on what you do. If I went networking, I’d like to give someone my business card. And I’d ask for theirs.
I hear it might not be needed in several instances though.
Having a fax machine is a business that spends you can do without? Really?
(A) You don’t need a dedicated phone line for a fax machine as you use a regular landline on those rare occasions you need to fax something & (B) explain to me how purchasing a scanner and paying for a faxing service is cheaper than a $40 fax machine?
If you buy a VOIP service, you get fax with it — usually included in the base package. That’s the way it is with the service we use, Nextiva. So you don’t need a fax machine with it. We used to have two landlines, but switched to VOIP and right there it cut expenses. So I think I understand the point that was being made.
But I also see your point, Ken, that there are alternatives to that method. I guess it just goes to show — if you start looking for ways to cut expenses you may find multiple methods. Sounds like there are lots of ways to cut down on fax expenses. 🙂
This is a great example of how a sample pool can bias results. Not that disagree w/ all of these, it’s just that the priorities and focus of these YEC vary greatly.
First there’s EE on the fax; the dedicated phone line expense is at least $40 a month. I have gone almost paperless, so no phone line, no paper, no toner, no files, no shredder.. adds up. So I agree w/ the story, that’s a cost that can be cut. But a different kind of business may have no choice but to use paper. Second, take ebele’s point on business cards; sure we may all have the phone, but do we really stop the networking to take down the info when we meet someone? Not likely.
There’s Robert w/ whom I agree on balance. It’s also the mindset of leadership; employees aren’t an expense, they’re an asset, an investment in the company. Provided it’s the right ones and you’re getting the results – that’s where I agree w/ the article. Sometimes that person is an employee, other times it’s a contract, freelance consultant, working at home and doing great.
Lastly, ala leadership mindset is point 7. As PR is my wheelhouse, like EE, that one stings. In part b/c I know that may well be the case for that business, but not all. And in part b/c I suspect that they consider publicity to be the end all of PR; it’s not even close. So like limiting what employee can/can’t do, or no business cards. You may not see a direct ROI, no one may notice when you have it.. but more often than not, they do notice when you don’t. FWIW.
I agree with everything except for employees. Employees are better to have than hiring services. While you can save money by hiring services, nothing beats having employees. And it is important to spend on them to sustain the business.
I ditched paid publications several years ago – everything is available now in digital format on-line, rarely use the US Postal Service anymore and save tons by not printing letterhead. Not ready to give up business cards yet, but certainly order less than in the past. What next? Probably my telephone landline.