Give Your Business Finances a Fighting Chance

Give Your Business Finances a Fighting Chance, by Morgan Leu Parkhurst

Whether you have owned your business for years or plan to open your doors for the first time next week, there are a few things you can do to save money.  The Joneses of the business world will have you believe that if a business looks wealthy then it must be.  But lessons of the last few years tell otherwise.  Do you want to give your business a healthy chance at survival?  If so, below are a few expenses worth postponing (or simply ignoring altogether) until your cash-flow is plentiful.

1. A luxury car.  I have met countless small business owners who insist on driving fancy cars to “look” established.  They operate under the impression (whether they know it or not) that the car they drive is somehow more important than the value they offer.  How sad.  If you can’t afford a luxury car, that’s okay.  Lead with your strengths, focus on the needs of the other person, and let the quality of your business show how established you are.  As for those business owners with fancy cars, well quite a few of them aren’t in business anymore.
2. Tailored suits.  Like the car, the tailored suit implies wealth but doesn’t ensure it.  Do you habitually tell clients and prospects where you buy your clothes?  If not then you’re in luck.  No one will ever know your suits aren’t tailored.  Most won’t care.  They have better ways to occupy their time, like thinking about how your proposal affects their bottom line.  If they do care, you probably don’t want them for clients anyway.  Stick with a few basic pieces for important meetings, save some money, and leave the fluff to someone else.
3. Dining at restaurants.  I love dining out as much as the next person.  But it can be a real cash guzzler on your business and personal finances.  It’s best to keep it in check.  To stretch your dollars a little farther, suggest coffee meetings instead.  You’ll be amazed at what you can save throughout the year.  Likely no one will notice the shift.  And if they do, they will probably secretly thank you for it since they could be taming their expenses (and waistlines) too.
4. Extensive business overhead.  Do you really need multiple landlines (in addition to cell phones), fax lines, and top-of-the-line printers as well as other operating expenses?  If not carefully planned for, these items can eat away at your financial stability.  If you can’t afford it, don’t buy it.  There are often low-cost alternatives to common operating expenses.  For example, instead of paying for another landline for your fax machine, set up an email fax account in its place.    
5. Business debt.  This one is tricky.  While we know we should keep our personal debt under control, we don’t always remember that for our business.  Every business “want” turns into a business “need,” and we end up taking on more debt than we should.  Perhaps you can’t run your business without a loan.  But do be careful how much you borrow.  Even if the business closes, you could still be personally liable for the remaining balance owed.  Ouch.  Work with organizations like SCORE and SBA to assess how much financing you really need, and whether you have the cash-flow in place to pay for it.

Giving your business finances a fair shot at winning isn’t always easy.  But it is worth it.  Let the love you have for your business energize you when you make sacrifices.  It is that love that will fuel you as you succeed at being your own boss.   

By day Morgan Leu Parkhurst helps individuals put the pieces of their marketing puzzles together.  By night she teaches marketing communications to aspiring entrepreneurs. Reach her at sharpmindmarketing.com or on Twitter at @Morgan_LP.