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How to be a Finance Rock Star in Your Business with Nicole A. Fende

By Melinda Emerson on March 29, 2012 in Cash Flow & Finance, Q & A Interviews, SmallBizChat

Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wednesday on Twitter from 8-9pm ET. This is excerpted from my recent interview with @NicoleAFende. Nicole is The Numbers Whisperer™ and President of Small Business Finance Forum. As a credentialed actuary with experience as a Chief Financial Officer, Investment Banker, and successful entrepreneur, Fende helps her clients reach their profit goals and learn how to effectively run the financial side of their business. In her book, How to be a Finance Rock Star: The Small Business Owner’s Ticket to Multi-Platinum Profits, Nicole shares how to reach multi-platinum profits. For more info: http://financerockstar.com/

SmallBizLady: Why did you think is the biggest financial challenge holding back small business owners?

Nicole A.Fende: Not understanding the drivers behind profit. You can sell a lot, but if your product or service is not priced correctly you may lose a lot of money rather than make a lot of money.

A close second is thinking the numbers can come later. That’s like saying I’ll worry about where to build my house after it’s built. If you build on sand the house won’t last. If your business is built on poor financial planning it is unlikely to last.

SmallBizLady: What does it mean to be a Finance Rock Star?

Nicole A.Fende A Finance Rock Star understands the basics of running a profitable business. They don’t need or want to know every last detail, but they do have a firm grasp on the fundamentals. Then they apply those fundamentals consistently in their business. When appropriate they bring in an expert to handle the nitty gritty.

Otherwise it’s like expecting a vocalist who can’t sing to be successful.

SmallBizLady: Why do so many business owners avoid numbers?

Nicole A.Fende: Fear. For some it’s the fear of math. The fear of not understanding how to analyze their business is common, so they just shove it away. However I also have clients who excelled at math in school. For them it’s the fear of what the numbers will say about their business. They’re afraid that the numbers will say their business can’t succeed.

SmallBizLady: How can small business owners overcome their fear of finance?

Nicole A.Fende Would you drive down the autobahn in a sports car doing 80 MPH with your eyes are closed? If you do that for more than few minutes you will end up crashing, maybe dying. Running your business without understanding the numbers is no different. You can’t see where you’re going, and sooner or later you will crash.

Face your fears. If it’s the actual math that scares you get help from a coach, accountant or bookkeeper. Think of it as Drivers Ed.

If it’s the fear of the answer, consider this. Would you rather find out you’re heading over a cliff after you’re airborne or before? If you know before you can change course and have a good chance of avoiding the crash. You can’t avoid a problem you can’t see.

SmallBizLady: Financing a start-up is hard, especially if your credit is less than stellar. What are some non-traditional ways entrepreneurs can get capital?

Nicole A.Fende: Crowd Funding has become quite popular online. I call it the busking of Web 2.0. You post a specific project or need online and then raise money for it. Friends, colleagues, even strangers can support your initiative. It is not a loan, nor is it charity. The person or business raising money offers some type of incentive or experience to those who pledge money.

Another option, often overlooked, is eBay. You can sell off any number of collectibles and dust collectors on eBay. I’ve discovered the saying “One man’s trash is another man’s treasure.” is absolutely true.

Some other options I cover in my book include; Sponsorships, Customer Funding, Peer to Peer Loans, and Joint Ventures.

SmallBizLady: Why is expense tracking so important? Do I really need to keep track of every $5 expense?

Nicole A.Fende: Every dollar of expense you don’t track is costing you $1.35!

So if you ignore a $5 expense it’s costing you $6.75 (5 * 1.35). If you ignore $5 expense every week of the year it will cost you $351 (52 weeks * $6.75). Would you throw away a check for $351 if I handed it to you right now?

Everyone hates tracking expenses (I do too!). My personal favorite is Shoeboxed.com to automate that task. Others include Keebo.com and Expensify.com. You might consider hiring a bookkeeper if the online solutions are not a fit. They are a cost conscious alternative to CPA’s.

SmallBizLady: One of your key mantras is “Time is money”. What do you mean by that?

Nicole A.Fende: Time is your most precious, irreplaceable asset. You can’t save time. You can’t buy more of it. When it’s gone it’s gone.

Let’s say you work a 40 hour week. Imagine that goes onto your financial statements just like your revenue. How are you spending it? Would you be embarrassed if you had to determine the return you are getting on your time?

If an hour of your time is worth $100, and you spend 2 hours a month on the free version of a service that costs $20 a month, are you spending your time wisely? Treat your time like a bank account that gets filled up each week. Spend it as carefully as you spend the cash your clients pay you.

SmallBizLady: What are some common pricing mistakes people make?

Nicole A.Fende:

Accounting for inflation. Whether your business is a service business or produces an actual product you have expenses. Those expenses will go up by at least the rate of inflation each year. If you don’t include that in your price you will earn less next year than you did this year.
Assuming that if you sell enough you will make a profit. This is false. In fact the more you sell of an underpriced product or service, the more money you will lose!

Simply setting their price by looking at what their competitors charge. First, do you even know if they make a profit? Second, do you know what their expenses are? Finally, would you let your competitor run your business? Then why are they setting your price?

SmallBizLady: You’ve said that offering promotions is like giving customers money from your personal bank account. Why?

Nicole A.Fende: When you set your price you assume a certain level of profit. Let’s say it’s $100,000 a year. You decide to run a sale. It’s a big success, however the revenues you received were $10,000 less than at your regular price. In other words, your business brought in $10,000 less in total money, but your expenses stayed the same. That means your profit, the amount you can pay yourself, is only $90,000 this year.

SmallBizLady: So how can you offer a promotion and keep your profits?

Nicole A.Fende: The easiest way is to bump up all your prices to give a cushion for discounts and sales. Another option is treat the revenue lost due to a promotion as a marketing expense. The key is accounting for it somewhere. If you don’t the only place left to get the money is from your pocket.

SmallBizLady: What are Key Metrics?

Nicole A.Fende: When musicians get on stage they don’t worry about every little detail. If someone misses a chord, or steps in the wrong spot once, it’s no big deal. The audience probably won’t even know and certainly will not remember.

However there are some problems which will kill a show. All the stage lights go out. The speaker system dies or gets stuck in one of those head exploding feedback loops. You may not be able to prevent a problem, but like the best live rock bands, you must be ready to fix it.

Key Metrics are the show stoppers for your business. This should not be a long list, simple and short is your goal. Examples include revenue, expenses, clients gained and clients lost.

SmallBizLady: Once I have my Key Metrics, what do I do with them?

Nicole A.Fende: Compare your key metrics to your experience at the end of every month. This will tell you very quickly if you are on track or need to make a course correction. Going back to our original example of the speeding sports car, Key Metrics let you know to keep going straight or if you need to turn to avoid going off a cliff.
If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter. Here’s how to participate in #Smallbizchat http://bit.ly/S797e

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of Quintessence Multimedia, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine named her #1 woman for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog http://www.succeedasyourownboss.com Melinda is also bestseller author of Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works.

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4 Things All Entrepreneurs Should Do On LinkedIn

By Melinda Emerson on May 31, 2011 in Ask Smallbizlady, Become Your Own Boss Tips, Branding & Marketing, Business Inspiration, Featured Post, Grow Your Business, Social Media, Solopreneurs, Starting A Small Business, Women in Business, Your Small Business

Linked in Logo

LinkedIn is important! 75% of all professionals in the US have a LinkedIn profile, which means if you want to do business you must have one too. LinkedIn is powerful tool that you can use to promote yourself if you are an individual consultant or a company with 2 or more employees. Here are my four tips that all entrepreneurs should do on LinkedIn.

Make sure your profile is 100%: If you do not have a headshot, please add a profession one. Typically, business owners who are not 100% lack recommendations. Look at your connections and ask at least three people to write why they love doing business with you. To make it easy, write the recommendation for them. This might be rough, but go ahead and do it. Actually, you should get in habit of asking anyone you interact with to give to a recommendation. I have over 47 recommendations and counting, you can never have too many.

Know Your Keywords: Your keywords should be spread across your profile. First your description of who you are should include keywords that your target customer would use to find you on the internet. Your summary and skills should also be peppered with keywords. This will also help you appear higher in Linkedin searches for experts.

Join LinkedIn Groups: You can join up to 50 groups on LinkedIn. You should join at least 10 groups that have your target customer in the group. You should have a strategy for how you will engage and attract members of the group to connect with you. Many groups allow fellow members to connect even though you do not know each other.
Answer Questions: One of best ways to standout in LinkedIn is to answer questions. It should become a part of your social media routine. Try to answer two to three questions a week and see how many new connections you will make for your business.

LinkedIn is a powerful tool and a great way to connect with decision makers. Make sure you are in the best position to promote yourself and your business online. Do you have any other LinkedIn secrets to promote a small business? For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog http://www.succeedasyourownboss.com.

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of MFE Consulting LLC, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. Forbes Magazine recently named her one of the Top 20 women for entrepreneurs to follow on Twitter. She hosts #SmallBizChat Wednesdays on Twitter 8-9pm ET for emerging entrepreneurs. She also publishes a resource blog www.succeedasyourownboss.com Melinda is also the author of the national bestseller Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works. (Adams Media 2010)

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What Small Business Owners Need to Know About Attracting Funding

By Melinda Emerson on April 26, 2011 in Cash Flow & Finance, Guest Articles, Your Small Business

“Where am I going to get money?” is a common question that small business owners have and it’s a real concern. If you are not in a position to be your own bank, you’ll need to find another source. When you are ready to start pitching banks or investors you might want to keep a few things in mind.

Here are 7 tips on attracting funding to your small business:

Dare to be different – Starting out, it’s vital to choose to operate a business where you already know something about the industry, or you have experience having worked in the field. Nobody wants to invest in a business where you’re reinventing the wheel, so use the knowledge to innovate something different in your field before you forge ahead.
Bootstrap like there’s no tomorrow – With no debt and no investors, you’re free to take your company in whatever direction you see fit. Rule #1 for the small business owner should be to self-fund for as long as is humanly possible – then look to external sources for funding.
Be more attractive – The #1 most attractive trait? It’s not being a blonde or driving a Maserati – it is being profitable! If you’re not there yet, have a clear, well-thought-out plan in place that shows your company’s path to profitability. This will enable you to at least negotiate some of the terms of third party investments.
Show your growth – For most businesses, funding in the early stages of a company’s launch is incredibly difficult. As the business owner, your #1 priority should be growing your business, in terms of customers and infrastructure. The best way to do this is to focus all of your energies on your core function and outsource what you can – the cloud offers ample opportunity to save time, effort, and money. Even early stage companies that show solid growth will be attractive to investors.
The impetus behind increments – The first step is to decide how much money you need. And no, “a lot” doesn’t count! When you’re talking to potential to investors, they’re going to ask you the size of the increments you’ll be offering (i.e. $1 million raised in $100,000 increments). Pick the largest increment size you think you can get investors to match. You can always split and quarter your increments, but some investors will take “one” no matter the size, and the fewer investors you have, the more control you’ll have over your own business.
VCs can be costly – My best advice is to avoid VC (Venture Capital) funding in your company’s early stages. When there is little you can offer them in terms of value, many VCs will “offer” to take a controlling stake in your business in exchange for the funds you seek. If you take them up on their offer, you will likely end up with a group of “bosses” that tell you what to do with your business to ensure a quick return on their investment. Once you’ve built a team and an infrastructure, and you’re profitable – that is the right time to go after VC funding.
Consider other options – Many times there are alternatives to VC funding including local angel groups, private investors and – surprise! – friends and family. In fact, the easiest money to raise is from friends and family – friends will follow other friends and, if you’re willing to let your family invest in your business, most will consider the investment sound. Try to evaluate what your venture realistically needs to succeed and first look for funding and strategic support close around you – you may be surprised at the interest and advise you’ll find!

Bill Grodnik is a CEO of Davinci Virtual. www.davincivirtual.com As CEO of Davinci Virtual and Davinci Meeting Rooms, Bill Grodnik is responsible for overseeing the growth and marketing strategy of both companies. Bill also earned a B.S. in Business from Arizona State University.

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Ask @SmallBizLady: How to Develop an Effective Sales Strategy

By Melinda Emerson on April 8, 2011 in Ask Smallbizlady, Cash Flow & Finance, Grow Your Business

Every Friday, I answer your small business questions in a video blog segment called Ask Small Biz Lady.

This week, we are taking on the question: How to develop an effective sales strategy for your small business?

Here’s the answer:

Know your target customer!
Determine your 30-day sales goal.
Determine your weekly sales goal.
Determine your sales activity action plan to generate your monthly and weekly sales goals.
This will also help your figure out your monthly marketing budget.

If you have a question for Melinda Emerson, Small Biz Lady, leave a comment on this blog using the contact us page or send me a note on Twitter @SmallBizLady, on Facebook at www.facebook.com/smallbizlady or you can hit me up on LinkedIn: www.linkedin.com/in/melindaemerson

I’m always here as a resource.

P.S. Want an “I [heart] #SmallBizChat t-shirt? It’s available! for $20.00 plus s/h sizes M-L-XL-2X

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Now Read This: Small Business Taxes Made Easy

By Melinda Emerson on April 6, 2011 in Cash Flow & Finance, My Recommendations, Your Small Business

I like this book Small Business Taxes Made Easy: How to Increase Your Deductions, Reduce What You Owe, and Boost Your Profits by Eva Rosenberg (@TaxMama).

It is great no-nonsense tax-advice! Eva is passionate about helping small business owners pay the least business taxes legally possible, but she also provides information (however tough it may be to read) on how to make your business more profitable. This book is full of effective business tax strategies that are good at tax time and throughout the entire year as you are running your small business. I conducted an interview with her to ask her more information about her book. Check out her other tax resources at www.taxmama.com

SmallBizlady: What are the tax characteristics of successful business owners?

TaxMama^®: They take the time to do three primary things for their business.

Foundation: They take the steps outlined in Chapter 1 of Small Business Taxes Made Easy to get the proper licenses, file with the proper government agencies, get the minimum requisite insurance coverage, and find the best advisors, vendors and resources for their business.
Prosperity: Successful business owners have business plans. They look at the big picture relative to their business goals, tying them in to their personal and family goals. Not only is this essential for building a good life, it ensures the business becomes ever-pro profitable, and protects them in the event of tax audits.
Tax Planning: They meet with their tax advisors, and perhaps their advisory team, at least twice a year to lay out a tax plan and to rebalance it as the year’s profits or losses emerge.

o This avoids the complaint one talk show host got from a local CPA. His client complained that his CPA wasn’t letting him take the medical and health care insurance deductions that TaxMama^® said his business should have.
o Why couldn’t he use those deductions? Simple. He had never taken the time to call his CPA to do the planning to establish the written plan his business needed in order to claim those deductions. Continue Reading →

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Managing Positive Cash Flow in Your Small Business

By Melinda Emerson on February 7, 2011 in Cash Flow & Finance

The two most important jobs you have as a business owner is getting business and getting paid. Being a bill collector is one the toughest jobs you’ll have as an entrepreneur. But if you take control of the situation up front, you can minimize any delays with payments. The key thing to do is make sure you are not hit with any surprises. Does your customer pay vendors net 45? You need to know. Here are some tips that I have used to in my business to manage cash flow:

1) Make sure you understand at the signing of a contract the procedure for getting paid. Ask about their accounts payable policy. Ask about whether you can be paid via electronic funds transfer, you get your money much faster this way. Then make sure you understand what you need to do to facilitate getting you payment.

How does your invoice need to be formatted?

Does your EIN number need to appear on the invoice?

Do you need to file a W-9 IRS form to become a new vendor?

Do you need to have an EDI system in place to get paid?

Note: An EDI system is Electronic Data Interchange (EDI), which is a way to submit invoices and receive payments electronically. If you are doing business with a major corporation or manufacturer, they may require this type of system for doing business with them. The great thing about EDI systems is that all of your transactions are web-based and available anytime and anywhere via the Internet.

2) Develop a contact in the Accounts Payable department. You never want to annoy your actual customer with a payment issue until you have no other alternative. If you start out knowing a name in accounts payable its makes things so much easier if there is an issue. Call this person at start of the contact to ask them what the procedure is for becoming a new vendor in the system and getting that first invoice paid.

3) Develop a discount incentive program for paying early. Please not do not discount for paying Net 30! That is what your customers are supposed to do. Offer a 2% – 5% discount for Net 10 or Net 15 payment for your customers depending on the amount of the contract.

4) Make sure you get a deposit up front and create an incremental payment schedule. You should offer your clients a payment schedule such as 50% at the start / 25% mid way / 25% on delivery or 25% / 25% / 25% / 25%. Do not even start work without a signed contract, purchase order and a deposit.

5) Start making collection calls at 30 days to inquire about the status of your invoice. In this economy, people will easily ignore an email, letter or fax. Do not ever be afraid to pick up the phone to ask about your money. Do not wait 45-60 days to initiate collection procedures. The polite, but squeaky vendor always gets the check.

Do you have any more suggestions for managing cash flow in a small business?

Melinda F. Emerson, known to many as SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure. As CEO of MFE Consulting LLC, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. She has been featured on NBC Nightly News, in Forbes, the Wall Street Journal and Black Enterprise Magazine. Melinda is also the author of the national bestseller Become Your Own Boss in 12 Months; A Month-by-Month Guide to a Business That Works. (Adams Media 2010)

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SmallBizLady’s Reading List Part I

By Melinda Emerson on November 23, 2009 in 10 Things Lists, Business Inspiration, Cash Flow & Finance, Grow Your Business, Mompreneurs, My Recommendations, Pink Slip Entrepreneurs, Social Media, Solopreneurs, Women in Business, Your Small Business

In business, reading is fundamental. It is crucial to help you grow your expertise as a business leader. One of my favorite things to do is read books about small business best practices, social media and leadership. Here’s a list of best books that I think will have a major impact on your business strategy heading into 2010. Later this week, I’ll have five more of my favorite books to share.

Small Business Cash Flow: Strategies for Making Your Business a Financial Success by Denise O’Berry (J. Wiley & Sons, 2006) The best thing you can do for your business is understand how much profit is in every sale and stay cash flow positive. Denise O’Berry writes a terrific book that explains the ins and outs of financial management in a successful small business. The book does a good job of pointing out how a small business owner can stay on top of the cash flow issue in running her business. This is an incredible resource book that I highly recommend.

Get Known Before the Book Deal by Christina Katz (Writer Digest Books, 2008) It is not often I read a book that truly enlightening from cover to cover. On a scale of 1-5, Get Known Before the Book Deal is a 10! If you want to know what it takes to get a book deal, Christina Katz gives a very specific recipe, but this book is not just helpful to people who want to be authors. This book is for anyone who needs to build a marketing platform and a brand for their expertise. This book changed my entire business model and my brand. I could not recommend this book more highly.

Customers For Life: How To Turn That One-Time Buyer Into a Lifetime Customer by Carl Sewell and Paul B. Brown (Doubleday, 2002) This is a must read for every business owner. None of the ideas in this book are ground breaking, but the authors do a great job of explaining how they translate into loyal customers for your business. This book will help you create systems in your business to avoid customer service problems in the first place. This book was originally published in 1998 and has been updated three times since, selling over 1 million copies worldwide. Every business owner should have this book, and I’d also recommend buying copies for all your employees as well.

Blog Blazers: 40 Top Bloggers Share their Secrets to Creating a High-Profile, High-Traffic and High Profit Blog by Stephane Grenier (Levac Publishing House, 2008) This is one of those books that serious bloggers will keep on their shelves. I like that this book features 40 top bloggers and not just 10 or 15 like most profile books. I enjoyed learning great techniques and about what blogs these pros read. Try reading a chapter a day, look at the blogs of the blogger featured, see what they are doing well that you can implement in your blog. Learning how successful bloggers approach their blogging is an exercise that will have lots of benefits.

Greening Your Small Business: How to Improve Your Bottom Line, Grow Your Brand, Satisfy Your Customers – and Save the Planet by Jennifer Kaplan (Prentice Hall Press, 2009) Green is not just the color of money. Going green can be overwhelming, but Jen Kaplan provides a comprehensive guide to practical, meaningful, low-cost changes that can be applied today to go green in your business. Green practices are being measured by everyone including your customers-so use this book to build an additional competitive advantage in your business and save the planet as the same time.

Do you know a book that should be added to the list? Let me know, I love getting your feedback.

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog www.succeedasyourownboss.com.

Melinda Emerson “SmallBizLady” is a Veteran Entrepreneur, Small Business Expert and Social Media Coach who hosts #SmallBizChat on Twitter. #Smallbizchat is the trusted resource on Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business. Melinda’s first book, Become Your Own Boss in 12 Months: A Month-by-Month Guide to Start a Business that Works! is scheduled to be released by Adams Media in Feb 2010.

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Finding The Money To Start Your Small Business

By Melinda Emerson on September 14, 2009 in Become Your Own Boss Tips, Cash Flow & Finance, Starting A Small Business

The following is an excerpt from my forthcoming book: Become Your Own Boss in 12 months or Less! A Month-by-Month Guide to Start a Business that Works! Scheduled to be released by Adams Media in February 2010.

If you are ready to take the leap into entrepreneurship, you must get really focused on your finances. It will be a real test to get back to only the bare necessities. Are you willing to reduce your lifestyle down to just basic living expenses? Most of the time, the initial capital to start your small business will come from you. Here are 8 tips you may not have considered to find money to start your small business.

Pay your mortgage twice a month to reduce payments. It is the accelerated payment program. Your mortgage company or a third party vendor offers this service for a low or no fee. The money will be automatically debited from your bank account. An extra mortgage payment is made each year; you can reduce a 30 year mortgage to a 22 year mortgage.

Go cash only. If you don’t have the cash, you don’t buy it. If you stop using your check card or credit cards to pay for everything, it’s much easier to stick to a weekly budget for yourself.

Avoid 90 days, 6 months or 1 year – same as cash deals. If you do not have the money the day you are making the purchase, chances are you will not have it in 90-days, six-months or a year from when it’s due. Keep in mind if you can’t pay, the interest rate is hefty and is compounded back to your original purchase date.

Cook at home and bring your leftovers to work for lunch. You’ll save money, get a healthier meal, and spend more quality time with your family. Look for free recipes online and start cooking!

Keep driving your car. Drive your car until it stops running. As a new business owner, you can no longer afford to upgrade your vehicle every two to three years. Buy a reliable car and take care of it, so you can ride without a car payment as long as you can. (I still do this! My car is five years old.) Try to plan your days so that you can do lots of major errands on the same day to minimize gas and parking expenses.

Grab a sweater. Turning down your thermostat five degrees and keeping a throw blanket nearby to save money on heating costs. The American Council for an Energy-Efficient Economy (ACEEE) says that for every degree you lower your thermostat, you’ll save about 3% of your heating bill. Putting your thermostat on a timer during the workday or while you are asleep will have an even greater effect on your heating bills.

Turn down the hot water heater. Heating water is the third-largest portion of the typical family’s energy bill. Heat water to 115-120 degrees to reduce power consumption.

Cut back on trips to Starbucks, Dunkin’ Donuts, Dairy Queen and Blockbuster. The money you spend each week on unnecessary extras can really add up. Treat yourself only once in a while. You’ll be shocked how the money you save will add up.

When you get started in business, you need three pools of money – an emergency savings account for your household, 12 months of budget to run your household, and 12 months of operating expenses to start your business. If you employ these simple money management tools, you will have the money you need in no time.

Comment on this blog if you have any other money saving tips to share.

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

Melinda Emerson “SmallBizLady”is a Veteran Entrepreneur, Small Business Expert and Social Media Coach who hosts #smallbizchat on Twitter. #Smallbizchat is the trusted resource Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business. Melinda’s first book, Become Your Own Boss in 12 months or Less! A Month-by-Month Guide to Start a Business that Works! is scheduled to be released by Adams Media in early 2010.

For more tips on how to start or grow your small business visit http://succeedasyourowboss.com and subscribe to Melinda Emerson’s blog.

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8 Things Small Business Owners Can Do NOW to Save Money!

By Melinda Emerson on June 2, 2009 in 10 Things Lists, Cash Flow & Finance

1. Track Expenses Using a Budget.

Budgets are about planning and tracking spending -you need financial information to make business decisions. Track business expenses by month or by quarter. Ideally, you should have a twelve month budget, but at the very least, make a three-month budget.

2. Eliminate Unnecessary Expenses.

Club memberships or services with monthly fees can add up over a twelve month period. Evaluate whether you actually use the private dinning room, the postage meter, the online credit alert service, or your merchant services account. Sometimes a private memberships club will allow you to park your membership for a reduced fee.

3. Relocate to Cheaper Office Space.

Overhead is one of the largest monthly fixed expenses for a small business. If you have a long term lease, start first with trying to renegotiate with your existing landlord. If that doesn’t work, look for other space or consider retreating back into your home. Contact the county where you are located to seek out HUB Zone space or see if they offer any tax abatement for locating in a certain area.

4. Lower Interest Rates on Loan Payments.

Work with your bank to arrange for automatic debit payments. Your bank will lower your interest rate if you agree to automatic debits.

5. Investigate if You Are Eligible For a Reduced Fees For Shipping.

I recently learned that my membership in the National Association of Women Business Owners (NAWBO) made me eligible for discounts for shipping and with rental car companies. Check member benefits with your local chamber of commerce and any other small business organization where you’re a member.

6. Lease or Buy Used Equipment.

Unfortunately, there are many businesses large and small going out of business theses days. There are plenty of opportunities to pick up gently used office furniture and equipment. You might also be able to pick additional office supplies. Try second hand furniture stores, too.

7. Consider Bartering Services.

You never know who might need your services. Start with business contacts, but do not overlook your personal day care provider, law professional, hair stylist or mechanic. You can also join barter network organizations. The key to bartering successfully is good verbal or written communication between the two parties. Whatever you agree to, be sure to communicate it in writing.

8. Comparison Shop for Everything.

Just as large companies require three bids to make a purchase, so should your business. Search the internet for deals, but beware of shipping fees. Sometimes the cost with shipping is not a better deal. Use the internet price to haggle with your local vendor for a better price for services, such as free delivery and installation.

If you make these simple changes I guarantee that you will begin to see more money in your bank. If this blog post was helpful, please subscribe to this blog’s RSS feed to keep up with the lastest information from succeedasyourownboss.com

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