Dealing With Money Troubles Within Your Small Business

Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. Even if you plan your small business out well, you can still run into money troubles if you’re not careful. In such instances it’s important to know what to do to get yourself out of trouble. The following contributed post is thus entitled, Dealing With Money Troubles Within Your Small Business.

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When you first start up a small business, your main motivation is likely to be money. Running your own company allows you to generate your own income without having to answer to anyone but your customers. You gain freedom and the same time as earning sufficient amounts of cash to lead a comfortable lifestyle! However, if you find that your business isn’t raking in all too much cash and starts to become more expensive to operate than you can really afford, you’re going to run into trouble! Money matters can make or break a business and it’s consequently extremely important that you monitor your business’ finances effectively. If you find that you are facing money worries, you need to tackle the situation head on, as attempting to sweep issues under the carpet isn’t going to get your anywhere. Here are just a few steps that you can take if you find that your small business is facing financial difficulty!

Determine the Extent of Your Financial Issues

The first step that you need to take when you are concerned about professional finances is to determine the extent of your financial issues. If you merely owe out a little money and have experienced a slump in sales, you may just need to wait for sales to pick back up. Consumer trends can often be confusing, but with a little research, you can determine why people aren’t spending as much at a given time and can take measures to encourage them to part with their cash. If you, however, are in a deeper and more difficult situation, where you are experiencing heavy debt within your business and cannot fathom being able to generate enough profit to pull yourself out of the situation, you might want to take on legal help from John Steinberger & Associates. They will be able to help you to determine whether options such as bankruptcy might be suitable for you.

Update Your Budget

Many businesses get into financial difficulty in the first place by making the same old mistake – coming up with a budget at the beginning of their venture and sticking to it. Of course, it’s always good to stick to a budget. But you need to bear in mind that the amount of disposable income your business has will fluctuate with time and interest. So make sure your budget fluctuates according with this. You can afford to spend and invest more when sales are high, but may need to cut back down if you experience a dip in profits.

These two steps can help you to determine your business’ financial footing as you progress and develop. Make sure to incorporate them into your plan as soon as possible to benefit from them as much as possible. They really could help you to stay in the black and out of the red!

Is There Power in Budgeting Your Money?

“You want to account for everything you spend and always keep your receipts son!”

An Important But Not a New Principle

Note. Like my Compounding Interest and Net Worth pieces, the subject matter of this blog post is not new. It has been known for years by those who’ve learned about it in their families, learned about its concepts in business school, or who have discovered it on their own. It’s a discussion from my personal perspective which I think is worth visiting. In the spirit of the first principle of my blog, Creating Ecosystems of Success, I’m simply introducing a concept and discussing why it’s important for the lay person, so they can make their own life choices.

As described in my piece entitled, I still don’t have a car in 2018, a good friend recommended that I craft something regarding budgeting. That piece described a key budgetary decision I made several years ago to fortify my financial future. In that piece I highlighted several financial vocabulary words which are pertinent to budgeting including: Assets, Cash Flow, Liabilities and Minimalism. In this piece, I’ll get down into the actual ‘nuts and bolts’ of budgeting.

“You know I always stay within my budget, honey,” my Auntie Adeline said to me on numerous occasions throughout our lives. Of my Aunts and Uncles, Auntie Adeline was always the most vigilant about staying within her budget and messing with her budget was literally playing with your life! Mom was also wise with her money and budgeted.

Accounting for Your Dollars and Cents

“You want to account for everything you spend and always keep your receipts son!” Dad was also very particular about his money and was very meticulous about where every dollar went. Though not formally trained in budgeting, I got the sense from many relatives that keeping track of where my dollars went was important. I started budgeting in my mid- to late-twenties though not effectively as I’ll describe later.

Simply put, a budget is a means of numerically accounting for tracking the money you earn and how much you spend every month. As described in earlier pieces, I have considerable experience with Dave Ramsey’s Financial Peace University (FPU). In it, Dave refers to a budget simply as a ‘Cash Flow Plan’ where you’re telling your money what to do and where to go. I’m going to come back to Dave, but first I’m going to tell you about one of my experiences.

A Tedious Task?

“I don’t keep a budget and I don’t have the patience to do so every month!” These words were typed by someone who’ll remain anonymous in one of my text groups. A regular budgeter now myself, I came very close to challenging his position, but I decided that it wasn’t worth it. From experience it’s not wise to argue with people who have taken staunch positions on things to try to get them to see your point of view. Sometimes it’s best to just let them be and let them figure it out on their own, if at all.

What this person’s comments showed was that while budgeting is important, there’s a negative view of it for some. In fact, in Trish Reske’s article entitled, How Many Americans Use a Budget?, she cites data from a 2017 study by U.S. Bank which found that 41% of Americans said they used a budget while whopping and 59% said they did not. That number was up from data reported by Gallup in 2013 which stated that only 32% of Americans used a budget.


Again, a budget is simply a written plan where you’re telling your money where you want it to go and what to do. You’re looking at what’s coming in and what’s going out and trying to figure out what’s leftover, if anything. What are the two skills you need for this important exercise? You need something we all learned in the first or second grade; the ability to add and subtract. You also need discipline and the abilities to think, and to sit and plan. There are other things you can do to aid in your budgeting process. For example, if you believe purchasing recyclable food packaging will help you save money in the long-term – they can be cleaned out and used multiple times – then you should include this within your strategy.

Simple Addition, Subtraction and Restraint

Okay, get ready for the magic. Specifically, you want to look at your monthly income and subtract your monthly expenses from it. If you’re working a 40-hour work week, this should be relatively simple. If you get paid weekly, you should get four paychecks every month and if you get paid bi-weekly, you’ll get roughly two pay checks a month. The Federal Government has 26 pay periods a year, so there are two months when employees get paid three times. How long is a check good for? Well that depends on how you budget your money.

Your income is your ‘Net Pay’ – your pay after all your deductions and retirement savings have come out – that’s if you’re saving into your retirement which is a different story, and one which Nadine Terman Solstein Capital could potentially help with, if you’re interested in investments. Underneath that number you want to list out your monthly expenses. The difference between your income and your expenses is called your ‘Cash Flow’, and that’s the money you have left to spend in any way you see fit. This sounds straightforward right? Well actually it depends.

Your income is your ‘Net Pay’ – your pay after all your deductions and retirement savings have come out – that’s if you’re saving into your retirement which is a different story. Underneath that number you want to list out your monthly expenses. The difference between your income and your expenses is called your ‘Cash Flow’, and that’s the money you have left to spend in any way you see fit. This sounds straightforward right? Well actually it depends.

Budget Surpluses and Deficits

This is a good place to introduce two new vocabulary words; “Surplus” and “Deficit” – concepts I recall first hearing about from Presidents Bill Clinton, and then later argued about by Al Gore and George W. Bush as they battled for the 2000 Presidency. Financially when you run a Budgetary Surplus, you have money left over once all your expenses and obligations are paid for. This is where you want to be – your expenses being less than your income, and you want them to be as low as possible.

If you’re running a Budgetary Deficit, your expenses are exceeding your income. This is where you don’t want to be. Here you either must: make more money, cut your expenses, or borrow and go into debt to cover your expenses – the worst option of the three.

Of course, if you do end up in debt, it’s important to get out of it as soon as possible – and that is something that you should be able to do fairly easily as long as you approach this in the right way. The best way is usually to use a service that will help you to pay off the debt faster – look into some Jefferson Capital Systems reviews for an example – so that you can get back on your feet as soon as possible.


Second you need to know how much money you have coming in weekly and monthly and I think we all know that. The fun part is figuring out what your expenses are. If you don’t know where to start for your expenses, first think about what Dave Ramsey calls your ‘Four Walls’: clothing, food, shelter and transportation. These are your basics. Think about everything else after these four.

Creatures of Habit

If you’ve been swiping either your credit or debit cards, go to your online banking accounts and see what your averages are. My high school basketball coach always used to tell us that, “We are creatures of habit!” In this case you’ll probably find that there are trends and patterns in your spending – the amount of times you go to Starbucks and what you get there, the restaurants you frequent, the amount of gas you put in your car every week, etc. Some months such as November and December may take you out of your normal spending patterns so be aware of those unusual months or times of the year. The end of the summer is another noticeable time, as people like to take vacations.

Once you see what your averages are, ask yourself if there are ways you can cut back. Can you catch more sales? Can you bring your lunch to work? Do you absolutely need to upgrade your phone or your car along with everyone else? Are there discounts you can take advantage of (being a senior, being military, being a government employee, etc.)? Do you need to make more money at least temporarily to pay off excess debt, for example? These are all questions you should start asking yourself when doing your budget. This brings me to my next point.

If you haven’t been living on a budget, and want to start one, it helps to have goals in mind. Do you want to retire one day? Do you want to become financially free? Do you want to not have to hit your friends and relatives up for cash whenever you get into a jam? These are all questions you should ask yourself. Not having to ask friends and relatives for money ever again is a huge motivator for me.

The Benefits of Budgeting

I described this in my last financial blog post entitled, I still don’t have a car in 2018. There I described how I got rid of my car and held off on getting another one so that I could grow an Emergency Fund and get to the point where I could acquire some investments. I also wanted to make sure I’d have a chance to retire one day.

For at least a year, I thought about what I needed to do to be able to save 15% into my retirement account going forward. When I looked at my budget, I did the math and figured out how much money I’d have to save into my retirement account from my first and second paychecks of the month to consistently do it. I then looked at what I could cut from my expenses and my eyes focused on my Cable bill which, at the time, was a whopping $176 per month.

Think about that. That’s $2,112 per year – money that could’ve been ‘compounding’ somewhere. I finally got to the point where I was willing simply use an antenna signal and just kept my landline and internet access which came to $90 a month – that’s a 50% savings which gave me the extra money to save into my retirement account. It felt strange at first, but it was very necessary, and I was okay watching Star Trek reruns every night.

Three Budgeting Points

I’m going to close with three points from Dave Ramsey because I’ve helped teach Financial Peace University and know it well. The first is the ‘Zero-Based Budget’. The key tenet of this term is, “giving every dollar a name.” That is, if you’ve done your budget and you have money left over, you should assign it a name like “Extra Discretionary Spending” or “Money For The Next Check” – don’t just leave it there because it will get spent on something random.

Consider using cash for at least some of your purchases – “Discretionary Spending” and “Eating Out” for example are two categories I use. Using cash may be scary at first as our world has become digital to the point where we pull out plastic and swipe everything using credit and debit cards. The problem with that is that you don’t ‘feel’ the money leaving your possession and are more likely to spend – businesses know this and bet on it. Using cash helps you feel the transaction, but it’s also the fact that its finite, and it exerts more control over your budget and overall spending.

Lastly, as Dave points out in the budgeting lesson, it takes about three months or so to get into a rhythm to the point where you’re budgeting effectively. The first couple of months aren’t going to be very good, but if you stick in there, eventually you’ll start to roll. Keep in mind your motivation for doing this. And lastly, once you get good at it and you’re able to use the budget to plan over a series of months, you’ll see some really great things happen in your life.

An Important Secret to Budgeting

Perhaps the most important point to make in all of this is that while you’re budgeting and working towards your goal, you must still allow yourself to have some fun. That’s going to vary depending upon you and your lifestyle. Whether it’s concerts, the movies, or if you have a restaurant you like, you can’t completely choke yourself off from pleasurable things because that’s not sustainable long-term – like dieting.

Earlier I briefly mentioned the concept of an Emergency Fund. I must mention this because these things all go together: budgeting, emergency savings, retirement savings, and investments. While this piece is about budgeting, having emergency savings is arguably the most critical component. It protects your budget when life’s inevitable and unforeseen emergencies come crashing into you – some by your doing and some not. Ideally you eventually want three to six months or more saved. How do you build your emergency savings? You budget for it!

Who should budget? Everyone should. There’s a saying out there that you should run your personal finances like a business and when you think about it, each of our households are mini-businesses where some are getting steadily wealthier and others are going further into the hole.
If you’re an entrepreneur and have a business idea, or you’ve already started your business, you should have a budget because the control of your capital and expenses are critical. Everyone should do it if even just to avoid paying the banks overdraft fees. According Julia Chang from Forbes, Americans paid $34 Billion to the banks in overdraft fees in 2017, and this is something the banks count on.

Budgetary Nerds and Free Spirits

One last important piece from FPU – maybe the most important. In the budgeting lesson Dave describes both budgetary ‘Nerds’ and ‘Free Spirits’. The former enjoys sitting down with the numbers and doing the budget while the other doesn’t and naturally lives with reckless abandon. I’m absolutely and proudly a Nerd and enjoy going over the numbers, making everything balance and doing the planning. If you’re a Free Spirit this might all seem unnatural for you, at least initially, and you may need someone’s guidance and encouragement. Ultimately, it goes back to your drivers and goals. What are you pushing for and how badly do you want it?

So that’s my take on budgeting. I hope you were able to get something beneficial from this. Again, there many, many financial writers and teachers and FPU is but one. It has worked well for me and I recommend it. However, for you someone else or something else might work better. I also enjoy reading Michelle Singletary’s work for example.  No matter who you learn it from though, the principles remain – you want to make smart and wise decisions with your money.

The Big Words LLC Newsletter

For the next phase of my writing journey, I’m starting a monthly newsletter for my writing and video content creation company, the Big Words LLC. In it, I plan to share inspirational words, pieces from this blog and my first blog, and select videos from my four YouTube channels. Finally, I will share updates for my book project The Engineers: A Western New York Basketball Story. Your personal information and privacy will be protected. Click this link and register using the sign-up button at the bottom of the announcement. If there is some issue signing up using the link provided, you can also email me at bwllcnl@gmail.com . Best Regards.

I still don’t have a car in 2018: A story about playing financial chess

“Most successful people operate off a healthy fear of failure!”

Three of the principles of my blog are: Creating Ecosystems of Success, Wealth Building and Long-Term Thought. Hell, I’ll also pull in both Creative and Critical Thought. As we’re riding into December of 2018, I’ve wondered what to write next. A friend of mine who runs her own magazine and has her own audience suggested that I write something about budgeting. I do intend to do that, but my mind thought back to something I wrote on the Examiner several years ago which will serve as a nice prelude to budgeting. It involves several important considerations when budgeting, and it might admittedly ‘trigger’ some people, but try to keep in mind the overarching messages.

I originally published a series called, You Still Don’t Have a Car Yet? around 2012. It was inspired by a question from a lady friend who went to my church and whom I briefly dated. We bumped into each other again one Sunday and she was surprised that I still didn’t have a car after getting rid of my old Saturn SL2 which was on its last leg. I heard in her voice that there was more to her question – something I’d experience again in the future.

Now, driving is expensive. It’s by no means cheap to get on the road. You have to undergo a series of driving lessons with a professional to ensure you have a proper license and don’t face issues revolving around Complaint Fraudulent License/ID down the line. When you get a car, it costs. On top of the original outlay, you need to make sure you can afford fuel, maintenance, tax, insurance and more. Upgrading really does require a lot of thought and financial commitment.

It’s a topic that never gets old, and instead of resurrecting and republishing the entire series, I’m simply going to pull out its main points and discuss why I still don’t own a vehicle six years later. Keep in mind that this piece was written from the perspective of a single man (due to life circumstances), and your life may be different. I hope you enjoy it and that it inspires discussion in your own circles. So, let’s dive in.

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My personal finances crashed and hit rock bottom right around 2011 – two years into my federal science career. I started my career with very little savings based upon my educational path and life circumstances. I was still a new homeowner and just paid out my entire $8,500 “Obama Tax Credit” for a condominium project I didn’t know about before closing – the first of many ‘assessments’ over the years which ended up equaling the price of a brand-new car. I also tried my hand in the investing world, at one point trying to do too many things at once, both money- and time-wise. The result was getting into a debt hole of greater than $20,000 on top of my student loan and other bills.

Around that time, I was fortunate that two friends shared Dave Ramsey’s “Financial Peace University (FPU)” with me and over the course of the next five to six years, they invited me to help teach the class with them at our church. I was also fortunate that I met a mentor who ‘adopted’ me into his group of proteges. He was very strong-willed and had a business background. He both taught me and stayed on me about some important aspects of money including: understanding what a ‘Net Worth’ is, saving into my retirement account and getting my ‘Matching Contribution’, and understanding the ‘Law of Compounding Interest’.

Now armed with this new information, it started guiding my decision making. FPU is admittedly just one of many financial programs out there, and it works very well. There are several others, but for the sake of my familiarity with it I’ll discuss it. A major pillar of it is budgeting – numerically think about your ‘needs’ and ‘wants’ with the aim of getting out of debt, building up an ‘Emergency Fund’ and then positioning yourself to stay ‘liquid’, invest, and give. To get a feel for why this important, I’ll once again refer you to back to Ylan Q. Mui’s 2016 article from the Washington Post entitled; The shocking number of Americans who can’t cover a $400 expense.

This is a good place to introduce the concept of ‘Cash Flow’. Cash flow is simply the amount of money you have left over once all your monthly bills and obligations are paid. The greater your expenses and debts are, the less cash flow you’ll have. The less they are, the greater your cashflow will be and the more life choices you’ll have. You’ll probably also have a healthier state of mind and body as financial stress can impact your overall quality of life.

When I looked at my budget in 2012, I sought to identify where I was trying to go in life and then what my needs and wants were. I wanted to live in a place of abundance, and I didn’t ever want to feel the shackles of debt again. I also didn’t want to be in position to have to ask relatives or friends for financial help ever again. Finally, I wanted to go that next step where I had an emergency fund, where I could get some investments, and lastly where I could help others – giving back to my alma maters for example.

While there were quite a few surprises in my condominium complex, it was a smart buy because it was right next to the metro. As such owning a car became less of a priority. Let’s unpack that a little bit. Keep in mind that I’m not telling anyone that they should get rid their car.

For you it might be something else and this would admittedly my approach may not work in cities like: Atlanta, Buffalo and Charlotte. In any case when I looked at my budget, getting rid of my car meant getting rid of: car insurance, gas charges, upkeep and maintenance, having to renew the vehicle’s registration, and any other associated costs. The state of Virginia charges personal property taxes on vehicles for example.

Yes, it was strange at first not having a car in my parking space and not being able to jump in a vehicle and drive off whenever I wanted to. As I describe later though I adjusted. It was a ‘trade off’ as the great Dr. Thomas Sowell says – giving up something in the short-term for what I saw as a greater gain in the long-term. I included the game of Chess in the title because like this, winning that game involves an understanding of the value of the pieces in your army, and in some cases, sacrificing your lesser pieces early on to ultimately win the game.

Let’s move on to some other important concepts. Among the things I learned from Robert T. Kiyosaki’s Rich Dad Poor Dad books were the concepts of ‘Assets’ and ‘Liabilities’. Under Robert’s definitions, assets are things that put money in your pocket every month, while liabilities are things that take money out of your pocket every month.

One of the things he described in his books under liabilities was cars. Was he saying not to buy cars? No, but he was encouraging his readers to look at finances in alternative ways – in this case while cars are symbols of power for some people, they also ultimately take money out of our pockets.

Speaking of which, something that’s been documented in numerous books and which wasn’t explained to me early on was that brand-new cars depreciate significantly as soon as you drive them off the lot. This is something I pondered as I decided to get rid of my car and not immediately get another one. I also realized that I was never really a ‘car guy’ meaning that I never really fantasized or obsessed over them. In fact, I got to a point where saw them as ‘necessary evils’ in a way which were put here to keep us dependent on the energy and auto industries, and at the mercy of those running them.

I’d like to now introduce the concept of ‘Minimalism’. Though this was always a part of my nature, I didn’t know what exactly it was though I had been called both ‘cheap’ and ‘frugal’ in my lifetime. Minimalism is basically the practice of getting what you need, and not wastefully looking to consume more. I credit writer and YouTube content creator Aaron Clarey for the term because I first heard it from him – something he encourages – something which goes against the grain of most of our society. If you’re in the mood for a laugh, his video content on culture and economics are both very funny and insightful.

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“If you live right next to the metro, why would you own car?” I’m going to say something controversial here. I’ve gotten this reaction from a certain group of people. It’s the same group of people who are content to eat soup and sandwiches according to my Dad as described in my piece entitled; Challenging Misconceptions in Wealth, Income and Privilege. I’ve gotten the ‘side-eye’ from another group of people, and for the single guys reading this, I’ll just say that many ladies frown upon a man who doesn’t own a car. Interestingly the other more important aspects I described above usually don’t come up in conversations about why I don’t own one.

I’ve also been ‘clowned’ about it in some instances. When you’re doing something like this, knowing in your heart why you’re doing it, and keeping your goals in mind is very, very critical when someone challenges you. Oh, and if you’ve thought it out and it’s working, don’t argue with anyone over it. It’s not worth it. This is an instance where even in adulthood, being the leader of your own life and not caving into peer pressure is key.

How does one get by without owning a car? Well again it helps to live right next door to a metro system. My first year of college at SUNY Brockport, I was amazed by the number of classmates from New York City who didn’t have their driver’s licenses. Where they were from, they just didn’t need them and openly admitted that.

Once I got rid of my car, I now noticed that there were quite a few other people in the Washington, DC metro area using “Zipcars”. Then within the last couple of years ‘ride share’ programs and ‘apps’ like “Uber” and “Lyft” became prevalent. Admittedly if you need to go to an area that’s further out, it usually requires some planning – maybe using a Zipcar, or maybe just renting one, but again you must keep your overarching goals in mind.

Again, it’s a tradeoff. There’s a definite convenience to getting in your car whenever you want to and zipping off some place, and that’s what you’re paying for when you own one unless of course it’s giving you some sort of social prestige or personal confidence boost. How much is that convenience worth to you?

So in summary, again I’m not telling anyone what they should do with their lives. I chose to make a tradeoff (a car and certain people) with specific goals in mind. Now that I had a grasp on money and finance as described above, my new ‘drivers’ (no pun intended) were:

• To become ‘financially peaceful’ and to build wealth;
• To be able to handle all the costs associated with homeownership – something I stumbled into which came with its own set of financial costs and surprises and;
• To maximize my cashflow so that I could save, invest and to be able to give.

In terms of giving, we often think about giving to our churches and alma maters but sometimes there are other needs. A fellow alumnus from Johnson C. Smith University recently needed to raise money to buy winter clothes for the students at his school in Grand Rapids, MI. Because of some of the personal choices I’d made, I was easily able to support his effort and help the kids in his community stay warm this winter.

Again, major components to all of this are long-term thought, and budgeting which I’m going to cover shortly in its own blog post. Another important piece is being a secure individual, following the beat of your own drummer and not being peer pressured into keeping up with other people’s thoughts of what’s acceptable for your life. The other piece is being malleable and willing to continue to learn more information and applying it to your life.

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I’m going to end this post with some quotes. The opening quote for this piece is from the popular and outspoken sports talk show host Colin Cowherd who weaves life parables into his sports commentary. This one involves our personal drivers and motivations. “My investing advice to the average individual, is don’t be average,” is a quote that has stayed with me from Robert Kiyosaki’s books. It involves thinking outside of the box and doing the opposite of the crowd.

Dave Ramsey’s famous quote is, “We’re going to live like no one else, so later we can live like no one else!” It involves making temporary sacrifices for greater gains later. Finally, one of the content creators on a YouTube show I regularly watch often says to, “Keep your savings high, and your overhead low!” I think you get the picture. What are your motivations and where are trying to go in your life?

Thank you for taking the time to read this blog post. If you enjoyed this one, you might also enjoy:

Your Net Worth, Your Gross Salary, and what they mean
A look at the Law of Compounding Interest and why you should care
My personal experience with Dave Ramsey’s Debt Snowball revisited
The difference between being cheap and frugal
We should’ve bought Facebook and Bitcoin stock: An Investing and technology story
Challenging misconceptions and stereotypes in class, household income, wealth and privilege

If you’ve found value here and think it would benefit others, please share it and or leave a comment. To receive all of the most up to date content from the Big Words Blog Site, subscribe using the subscription box in the right-hand column in this post and throughout the site, or by adding the link to my RSS feed to your feedreader. Please visit my YouTube channel entitled, Big Discussions76. Lastly follow me on Twitter at @BWArePowerful, on Instagram at @anwaryusef76, and at the Big Words Blog Site Facebook page. While my main areas of focus are Education, STEM and Financial Literacy, there are other blogs/sites I endorse which can be found on that particular page of my site.

Easy Ways To Save Money To Start Your Own Business

Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. One of the challenges to starting a new business is raising the money. There are several ways to approach this problem. What are some simple ways? The following contributed post is entitled, Easy Ways To Save Money To Start Your Own Business.

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When you’re starting a business, the first thing you need is a great idea that has the potential to sell. The next thing you need is money. You can come up with all of the great ideas that you like but you’re never going to get anywhere without startup capital. At some point, you’ll need to go to investors to get some cash to build the business. But people aren’t going to put their money behind a business that hasn’t proved itself yet. You need to get things going and start building a bit of a customer base before you can realistically approach investors. If you’re lucky, you might have that kind of money sitting in your savings account but most people don’t. If you’re serious about starting this business, you’ll need to take some drastic steps to get the cash together. These are some of the best ways to save up money to start your own business.

Image From Flickr

Slash Your Budget

You’re never going to get to where you want to be without making some sacrifices. If you’re going to put together that kind of money, you need to be brutal with your budget. All of those luxuries that you normally enjoy are just eating into the cash that you could be saving for your new business. Write a new budget that covers all of your essentials and get rid of any extra luxuries. That doesn’t mean you can never enjoy yourself again but every time you think about spending money on something frivolous, look to the future and consider your business.

Earn Some Side Income

Your job might not be earning you enough to save for your business. If that’s the case, you need to find some ways to earn more money. Looking for a better paid job is one option but if that doesn’t work out, there are plenty of other ways to make money. If you know how to make a lot of money fast through side hustles, it’s a lot easier to save up the startup capital you need. You could do anything from becoming an Uber driver to trading cryptocurrencies. Whatever it is, just find as many ways as possible to bring in extra cash on the side.

Cut Your Startup Costs

You should have a goal amount in mind when you’re saving. Look at what the rough startup costs of your business will be and that will give you something to aim for. Things will be a lot easier for you if that bar is a lot lower, that’s why you should think about cutting startup costs for your new business before you even start it. Running it from home is one of the best ways to do that because you cut a lot of overheads like office space and lots of employees. If you plan a way of running your business on a barebones budget to start with, saving up the cash you need will be a lot easier.

Saving up for your own business is hard, but if you’re dedicated enough, it’s absolutely possible.

10 Things To Teach Yourself To Make More Money

A key focus of my blog is Financial Literacy/Money. In the Rich Dad Poor Dad books, Robert T. Kiyosaki described two money problems; having too little money and then having too much money. Most people suffer the former. The following contributed post is thus entitled, 10 Things To Teach Yourself To Make More Money.

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Most people want to make more money, but they are unwilling to do anything about it. They stay in the same, dead end job for years on end – maybe they even climb the ladder a little bit. Very little happens with the money they are earning. Rather than going out there and improving their skills so that they can perhaps get a pay rise, land a better role within their company/outside of their company, or even start their own business, they just stay in their comfort zones and stick to what they know.

It’s true that change can be scary, but working on yourself will give you more knowledge and confidence, and these things can be extremely powerful when you want to make more money. So, what can you set out to teach yourself if this is what you want to do? Read on for 10 suggestions…

1. The Right Mindset
Having the right mindset before you set out to make any more money is key. Otherwise, you might make more money initially, but you may lose it. You might even struggle to see opportunities that are being presented to you.

Changing your old thinking patterns and getting into new, money positive patterns can be tough. After all, much of what we think has been ingrained into our subconscious from a very young age. However, with consistency, it’s possible! Read books, watch videos, go to seminars – do whatever you can to change your mindset around money. Figure out your limiting beliefs and work on your blocks. Then take action.

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2. Passive Income Techniques
Passive income allows you to make more money while you sleep. If you want to build real wealth over time, these techniques are key. Why? Because one day, you’re going to run out of time. You’re going to be unable to work as much as you once did. It makes sense that swapping time for money is no longer the best way of getting that cash! Passive income techniques include things like vlogging/blogging, writing ebooks, creating online courses, and starting simple businesses on sites like Amazon. Do your research and select one method to start with. This is a long game, so don’t be upset when you don’t become an overnight success.

3. Coding
Coding and programmers are in very high demand today. Anyone can learn the skills required, although they can be tough. You can take boot camps to learn programming languages in just a few months, and they will help you to get hired quickly. You can even find simple coding courses and help online. You can look at sites like Asap developers to begin your research and learn more about what you should be doing. There’s going to be something out there to suit every comfort level.

4. Writing
Writing is also a skill that anybody can develop, although you’ll need to practice every day. The more you practice, the better and faster you’ll get. You can also take courses online for this. These skills can be used both in a business of your own and in the workplace. They’ll help you whether you’re creating your own course, responding to an email, or writing a blog post.

5. Multiple Languages
Learning a language is something kids are fantastic at, because their brains are like sponges. However, as we get older, we can find it more difficult to let that language sink in. That doesn’t mean we shouldn’t try! There are free resources and apps that can help, as well as taking one to one classes or tuition to improve. This can prove beneficial in many jobs, and especially if you want to start a globally successful business.

6. Investing
Investing is one of the only true ways to build wealth over time. This is a fact. Saving money can help you when you have an emergency, but those savings are going to depreciate over time. Instead, making small investments while you teach yourself the lingo and the ropes will get you well on your way to having more wealth and a diverse portfolio. Again, this is a long game. You have to set it and forget it when investing your cash.

7. Graphic Design And Image Editing
Another skill that is valuable in today’s workplace. Many places need people with these skills for their websites. UI designers work to help improve the look and feel of websites and apps to make things easier for customers and consumers.

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8. Online Marketing
Every single business needs online marketing these days with these sheer number of people using the web to find things that they are looking for. You’ll learn all about SEO, PPC, social media, and more. It’s usually best if you pick one subject and roll with that for a while, however, Knowing these things will always make you a more valuable asset.

9. Public Speaking
Public speaking comes naturally to some people. Others can find it very difficult, and even terrifying. There will usually be a time in most employee’s careers where public speaking will be a must, such as making an announcement in office or speaking at a conference. Preparing or this now will take away any fears and reservations and ensure you knock it out of the park.

10. Social Media
Your social media skills might already be great – most people are on sites like Facebook and Instagram now, aren’t they? However, using these platforms professionally can be a huge bonus. This proves that you are technologically savvy and that you have excellent PR skills. If you work in any sort of marketing capacity, you need to prove that you are able to use social media effectively.
The above 10 skills are things that will help you to make more money, whether you’re trying to climb up the corporate ladder, ask for a pay raise, or get out of the rat race altogether and start your own business. Which will you start with, and how are you going to do it? Let us know!

Super Simple Ways To Free Up More Money

A key focus of my blog is Financial Literacy/Money. A key aspect of Financial Literacy is understanding how to manage and minimize expenses. Decreasing your personal expenses is in a lot of ways similar to giving yourself a raise. The following contributed post is thus entitled; Super Simple Ways To Free Up More Money.

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Freeing up money in your life might sound like something you want to do, but you’re not sure where to begin. We’re here to tell you that there are probably numerous ways you haven’t even considered that will help you to free up more money! However, there’s one thing you need to do first: take a look at your relationship with money and figure out how you really feel about it. Many people like money, but they feel guilty or ashamed of wanting more of it. Some people openly admit that they don’t like money at all. If this is the case for you, how can you expect to have and keep more of it? It just won’t happen. Get yourself into a place where you can appreciate money and feel good about having it, and then start working on ways to free up money in your life. You’ll get far better results.

Now you’ve done that, read on for more suggestions!

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Switch Utility Suppliers
If you haven’t switched up your utility suppliers in years like many homeowners, now is the time to have a look and see if you could be getting a better deal elsewhere. Chances are, you’ve been paying far more than necessary for some time now! Check online for a better deal, then call your current suppliers and see if they will match or beat what you’ve found. If you do end up switching, the suppliers do all of the work for you!

Downgrade Your Phone
Do you really need the latest phone? There’s only so much we really need to do with them, and we spend a lot of time on them as it is – taking away from what’s truly important! Downgrading your phone could save you money and give you more time with the people you love.

Sell Items That Are A Big Drain On Your Finances
Take a look around your house and sell items you no longer use. Better yet, sell items that are a big drain on your finances. If you have a motorcycle that is mostly for show, you could sell it with the American Motorcycle Trading Company. Do you really want to keep the bike, keep the fuel topped up, pay for insurance and other maintenance costs, when you only really use it every now and again?

Shop At A Different Store And Always Take A List
Stop shopping at expensive stores when you can get the same items at a much lower price from a discounted store. Always take a list with you too, and never go hungry. You’ll save a fortune.

Track Every Expense
Track your expenses so you can see where your spending habits can be improved. You might be surprised at where a lot of your money is going.

Always Look For a Coupon Or Cashback
Never shop without looking for a coupon or using a cashback site. You could be wasting a ton of money – there are even apps to apply coupon codes for you these days!

Simple Ideas. Big Money

Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. If you’re thinking about starting a new venture, it’s important to know what simple ideas you can you use to generate extra cashflow. The following contributed post is thus entitled; Simple Ideas. Big Money.

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Sometimes it’s the simple things in life that seem to make us happy. The things that we just can’t take our minds off, and the things that as soon as we think about them, we smile. But when it comes to business, the thought of a simple thing is few and far between. It would seem that pretty much everything is related to stress and confusion. Arguably, the time when this is at its highest is when we’re thinking of the idea to begin with. All your mind can think about is what might be involved with the process, how you can make more money, and all of the things that could possibly go wrong. So, what if we were to give you some simple ideas, that would make some big money. Ideas that wouldn’t require you to do much, but that you would get a lot out of? Well, you’ve come to the right place, because that’s exactly what we’re going to do for you!

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Farming Ideas

Ok, so this one is a little out of the box, and one that we think you might not have thought of before. But, if you were to go into the agricultural industry, you really could be set for life. Farming is not only fun, but highly profitable if you produce good quality produce that people are after. The main expenses you will have will come from your equipment, and the expenses of caring for any animals. You will need tractors, and you will need a lot of red diesel, which can easily be sourced from the internet as to save money. Once you figure out all of the logistics of how to rear animals, plant good quality produce, and maintain it all, you just need to figure out your sales points. Where is the best place to start? Farmers markets. It’s the easiest place to sell the produce, and you can easily make a name for yourself over the years. Enter competitions, grow a following, and reach out to supermarkets. Before you know it you could be a worldwide brand!

Food Ideas

Sticking to a good theme still, but being slightly different in terms of what you can do. If you’re thinking of setting up a food business, you have to consider the lucrative idea of going into the restaurant business. But don’t just set up your average pub, you need to go for something hip and interesting. One idea that we think will really capture the eyes of people is a healthy eating establishment. Put it next to the gym, and make your menu one that just can’t be beat in terms of creativity, and you should always be able to bring in the money. It has to be creative though, the funkier your make literally everything, the better you’re going to become.

Activity Based Ideas

Some people like to be active, some don’t, but who says this idea is out to encourage everyone to get sporty? This ideas is funky, as we’re going to suggest opening up your own indoor inflatable course. Adults and children could be catered for if you made it big enough, and it is so unique that people will always want to be a part of it. Definitely an idea worth doing if you’d like something easy to manage, and easy to maintain. You’d just have to make sure you’re highly focused on health and safety here.

A look at the Law of Compounding Interest and why you should care

“Compounding Interest is the ‘Eighth Wonder of the World’. He who understands it, earns it. He who doesn’t, pays it!”

Note. Like my Net Worth piece, the subject matter of this blog post is not new. It has been known for years by those who’ve learned about it in their families, learned about its concepts in business school, or who have discovered it on their own. It’s a discussion from my personal perspective which I think is worth visiting. Also, while this is a ‘money’ topic, I’m discussing it from a ‘scholarly’ perspective. I’m not rendering financial advice where I’m telling readers what they should do. In the spirit of the first principle of my blog, Creating Ecosystems of Success, I’m simply introducing a concept and discussing why it’s important for the lay person, so they can make their own life choices.

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“Because we’re getting our Ph.D.s and we’re in school for so long, we won’t start making our money until much later,” my lab mate and senior graduate student Damon adamantly said. “When you save and invest your money, it doubles about every 10 years, and we’re missing out on the ‘doubling cycles’! The classmates I attended Colgate University with, who’ve already gotten out and started working, are already seeing their money double!”

To start this off with some humor, coming from the eastside of Buffalo, anyone named Damon I’d ever met up to that point was black, but this Damon was of Greek descent. Damon was a very smart, opinionated and short-tempered guy. He was also knowledgeable on numerous topics: current events, politics, and economics, and I loved talking with him while in our research lab as I always learned something.

Damon introduced me to one of my current heroes, Dr. Thomas Sowell and let me borrow his copy of Inside American Education, which Dr. Sowell wrote. I didn’t know it, but that day while our Pharmacology experiments ran, Damon gave me my first lesson ever on the “Law of Compounding Interest”. I was in my late 20s, and similar to my learning about the ‘Net Worth’ and a ‘Matching Contribution’ concepts, it was late in the game, but still much earlier than many people learned about it. So, let’s talk about the Law of Compounding Interest and why we should all care.

As opposed to trying to piece together an explanation of Compounding Interest myself, I’m going to simply reference the book How To Turn $100 Into $1,000,000 which I referred to in my post entitled, Challenging misconceptions and stereotypes in class, household income, wealth and privilege. In that story I talked about how my mentor challenged me to read what appeared to be a children’s book. While it is written for children, the book contains lots of valuable information that many adults don’t have a handle on – even those in their 40s and beyond. Since reading the book I’ve consequently given copies to my younger cousins and other youngsters in my circle to give them the chances I didn’t have. You should too!

Before discussing the Law of Compounding Interest, I’m going to jump ahead to Chapter 9: Investing, because for the sake of this post, it needs to be introduced first. According to Chapter 9, investing is defined as, “Putting your money into something that can potentially make you more money.” There are likewise lots of investment classes out there: stocks, real estate, and businesses of all kinds.

Coincidentally, the same buddy I discussed in my post entitled, We should’ve bought Facebook and Bitcoin Stock, recently approached all of us, looking for ‘investors’ because he wants to start his own Amazon store – a ‘speculative’ investment. When you think about the Law of Compounding Interest though, you want to think about putting your money in places where it will steadily ‘appreciate’ over time – someplace safe where you’d place your retirement savings for example (discussed below).

Two important concepts to understand here are ‘Principal’ and ‘Interest’. Financially, Chapter 8 assumes readers understand the meanings of Principal and Interest in the context of getting a ‘Return on Investment’ (ROI), as opposed to the borrowing context where you’re paying someone else interest on a loan. The chapter quickly starts discussing how Interest can steadily build your Principal from year to year.

If for example you have a $100 and it’s invested in something at a 5% interest rate after one year, you’ll have earned $5 so your total principal at the start of year two will now be $105. If you keep that $105 principal invested, it will earn the 5% on that amount and not the original $100, so your new total after year two will be $110.25, and so on. This is just an example, and this is just with the starting a principal of $100, but what if you started with a greater principal – let’s say $2,000, and you steadily added more money to it every month for 10-20 years? For retirement purposes the ideal scenario is to be invested for 40 years allowing one to retire well at age 65. Ideally the person should have started investing/compounding at age 25. However, getting started at any age is the key.

The second aspect of the Law of Compounding Interest discussed in the book is the “Rule of 72” on page 84. The Rule of 72 is a calculation which allows investors to determine how long it will take for their money to double based upon a given interest rate. To determine this number, you simply divide 72 by the interest rate that you expect to earn over time. The higher the expected ‘Rate of Return’, the less amount of time it takes to reach your goal. For example, if you divide 72 by an interest rate of 10%, it would take 7.2 years for your money to double. If you divide 72 by an interest rate of 2% the time would be 36 years – hence the importance of looking for the most competitive rate of return relative to your personal risk tolerance when looking for investments.

The chapter cites two more examples which highlight the importance of continuing to add to your principal and then the importance of time. The example on page 86 shows the difference in returns when two siblings both start with a $5,000 investment at the same age at an interest rate of 8%. One sibling continues to contribute to her account out to age 50 – that is $1,000 every year and arrives at 50 years of age with $750,000. The other doesn’t contribute anything further and arrives at 50 years of age with a total of $200,000.

The last example on page 87 gives an example of two people who start investing at different times in life (pictured above). In this example both subjects become millionaires by 70 years of age. The first individual started saving $1,000 per year starting at age 15 and paid in only $55,000 to reach their $1,000,000. The second individual started at 30 years of age and had to put in a total of $140,000 to reach their $1,000,000. The take home lesson here is that because the first person started earlier, it took them less than half the principal of the second person the reach their $1,000,000.

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My classmate Damon’s words at the start of this post, underscores these last two points. Our peers who started working immediately after earning their Bachelor’s degrees, were in theory able to start taking advantage of the Law of Compounding Interest earlier, assuming they knew to do so. Working towards our Ph.D. s, we wouldn’t be able to start the process until much later. But there were other professionals from our peer group who were getting even later starts than us due to the nature of their fields and the amounts of debt incurred during their educations; the Law and Medical students come to mind.

There’s another piece to this though. What about individuals who didn’t go the college route at all? They too would’ve been able to start using the law earlier in life assuming they knew about it and followed it. So, as I’ll describe below, having a degree has nothing to do with using this law.

Who should care about the Law of Compounding Interest? Everyone. That goes for STEM professionals like me and Damon, ‘Blue-Collar’ workers swinging hammers, cooks in the kitchen, lawyers in courtrooms, non-degreed individuals, business owners/entrepreneurs – everyone. No matter what your profession is, you only must know about the law, start it, and start it as early as you can.

To start using the law and to using it correctly, one must embrace two of the principles of my blog; the learning of Financial Literacy/Money, and Long-Term Thought/Delayed Gratification. Thus far in my writings I’ve discussed the latter principle sparsely, but it’s key here because to take advantage of the Law of Compounding Interest, the individual must think long-term. This means that they must be disciplined enough to live without a certain percentage of their paychecks every month.

They’ll also forgo or delay some short-term luxuries and indulgences for greater gains later – playing the game of ‘Chess’ in a way. This isn’t something that’s necessarily easy to do in the presence of considerable peer, societal, and in some instances familial pressures. See my Mother’s Day 2017 post, to get an idea of how to lose both money and time due to personal and cultural pressures.

What are the real-world applications for this? I’ll cite two articles. The first is by Rodney Brooks of the Washington Post. I cited his article entitled; 71 percent of Americans aren’t saving enough for retirement in my post about the Tax Reform and Jobs Act. It discusses reasons why people can’t take advantage of the Law of Compounding Interest. Another piece is entitled; Club Fed millionaire: Membership 23,000 and growing by Mike Causey which discusses the growing number of federal employees who are retiring as millionaires – most self-made. I’ll say it again, the majority are self-made meaning no one gave them anything, and they simply methodically prioritized, saved, and invested their money.

There’s a final context for the law, and that’s giving. When you think about Higher Education, philanthropists and generous alumni often leave gifts to their schools of choice through ‘Endowments’, many of which are invested so that they’re continuously compounding and generating returns used for scholarships and operating expenses. The famous Jim Kramer runs his “Charitable Trust” of which he is continuously thinking about out how and where to safely invest its funds for charitable purposes. Lastly, consider how the lives your relatives and your community could be changed by having a continuously growing principal and interest you can use in any fashion you see fit: saving up a down payment on a home, college tuition expenses, seed money for building businesses, supporting political campaigns, etc.

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If it sounds like an underlying theme of this post and others like it is that your financial (and life) success is about what you know and don’t know (outside of your profession), then you’re correct. In an upcoming story I’m going to discuss how I didn’t understand these pieces when I first started my federal science career and didn’t take advantage the Law of Compounding Interest or the federal government’s ‘Matching Contribution’ – both of which have cost me money. There were actually several personal ‘blunders’ in these areas.

The opening quote for this piece is from the famous Physicist Albert Einstein and it pretty much sums up the importance of this topic – either you’re getting paid, or you’re paying out. Compounding Interest is something anyone can take advantage of regardless of: race, creed, color, sex, gender or religion. One just must know about it, and then start living by it. If they don’t know about it, they must be curious enough to find out about it. Most financial literacy programs cover it in some way.

There are other necessary pieces such as ‘Budgeting’ which I’ll cover as well in another post. As I stated in my Net Worth piece, it’s not something that can be worked out with your boss, or even legislated by the government, though I do think schools could do a better job of teaching this information at an early age. In closing, two other principles of my blog do tie in here, and they are Self-Accountability and Self-Reliance, because first, the individual must realize that no one can make them practice and incorporate this law into their lives, and secondly, it’s themselves who have to do it. And with that, I hope you’ve learned something here about the Law of Compounding Interest.

Thank you for taking the time to read this post. If you enjoyed it, you might also enjoy:

Your Net Worth, your Gross Salary, and what they mean
The difference between being cheap and frugal
We should’ve bought Facebook and Bitcoin stock: An investing story
Challenging misconceptions and stereotypes in class, household income, wealth and privilege
What are your plans for your tax cut? Thoughts on what can be done with heavier paychecks and paying less tax
My personal experience with Dave Ramsey’s Debt Snowball revisited
Mother’s Day 2017: One of my mother’s greatest gifts, getting engaged, and avoiding my own personal fiscal cliff

If you’ve found value here and think it would benefit others, please share it and or leave a comment. To receive all of the most up to date content from the Big Words Blog Site, subscribe using the subscription box in the right-hand column in this post and throughout the site, or by adding the link to my RSS feed to your feedreader. Please follow visit my YouTube Channel entitled, Big Discussions76. Lastly follow me on Twitter at @BWArePowerful, on Instagram at @anwaryusef76, and at the Big Words Blog Site Facebook page. While my main areas of focus are Education, STEM and Financial Literacy, there are other blogs/sites I endorse which can be found on that particular page of my site.

Cutting the Costs of Starting a Home Business

Two of the focuses of my blog are Financial Literacy and Money, and Business and Enterepreneurship. If planned well and set up correctly, a home business can generate considerable profit. There are some important keys to keep in mind. The following contributed post is thus entitled; Cutting the Costs of Starting a Home Business.

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Most of us have at some point considered starting a business. Sometimes, this is simply because we’re fed up with work. We see mistakes being made, we watch as businesses are poorly managed, and we know that if we had our chance, we could do a better job. On other occasions, our urge to start up on our own comes from necessity. We need more flexibility. We can’t find a job that gives us what we need and starting up on our own would answer all of our problems.

Whatever your reason for wanting to start a business of your own, one thing that might put you off, or at least give you cause for second thoughts is money. Starting a business from home doesn’t need to be as expensive as hiring premise, but there are still start-up costs to consider, especially if your business model is one that requires equipment, machinery and supplies. Here are some ways that you could slash some of the costs.

Buy Second Hand

Every business has needs. Whether it’s just a few supplies, a computer and other office paraphernalia, or tools, machines and equipment, you’ll need to spend money to get started. But, you can save a fortune by buying second hand and replacing things later, when your business is bringing in more money. Look for auction near me for tools, and consider refurbished laptops and other technology. Remember, we live in a world where businesses fail every day. These companies are keen to recoup some of their costs by selling what they can, so keep your eyes open for bargains.

Get Online

Marketing is often one of the most significant expenses for new companies. You need to get the word out and let people know what you do if you want to grow after all. But, in today’s digital-dominated world, there’s no need. Get online, spend time on digital marketing campaigns, work with influencers, and promote your business on social media. It’s perfectly possible to present a professional marketing campaign and reach a large audience without spending a penny.

Call in Some Favors

If you are looking to save as much money as you can, call in some favors. Tell your friends and family you are starting up on your own and they’ll be keen to help. Even if it’s just sharing your posts on social media, it can make a difference.

Make the Most of Your Time

If you want to save money, you should also be thinking about saving time. The more time that you waste, the less you’ve got to be out there finding ways to make money and grow your business. Manage your time well, and make the most of every working hour.

Go Green

Going green isn’t just good for the planet, it can also be good for your bank balance. Start saving money on utilities by printing less, turning lights off, shutting computers down and saving water, and your bills will be much cheaper.

Outsource Work

Staff are another big cost that you might need, but not be able to afford. Outsourcing work instead of taking on permanent employees means that you only pay for what you need, when you need it, instead of having to pay someone all of the time.

Finding The Financial Wiggle Room Your Business Needs

Two of the key focuses of my blog are Financial Literacy and Money, and Business and Entrepreneurship. No matter what your business idea is, figuring out how run a surplus is critical. Likewise many new businesses don’t last due to the poor management of costs. The following contributed post is thus entitled; Finding The Financial Wiggle Room Your Business Needs.

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Are you feeling the costs starting to bite at your business? Are you risking your profits by letting your expenses go unchecked? Success in business isn’t just about creating the product and service the market needs and selling it to them effectively. You have to make the best use of the resources available to you, money most of all. To help give you more to make use of, we’re going to take a look at ways that you can cut the costs in your business.

Image Source: Pixabay

Consider relocating
Where does your business do its work? If you’re renting out office space, could it be more economical to downsize? Many teams are moving away from the traditional office space, entirely. For instance, a small team might be able to work just as effectively from home, connecting to one another via the internet in a remote working agreement. Otherwise, you might want to consider sharing your space to cut down in costs, too. Either you can look at the possibility of leasing out existing office space or moving your team into coworking spaces shared with other businesses, as well.

Be economic about your equipment
Every business has to invest in the right equipment to some degree. But you don’t always have to buy it at market value. When it comes to equipment like computers, monitors, printers, keyboards, speakers, and the like, you should look at the potential to lease that equipment. Buying might be more cost-effective in the long-term, but leasing can help you make immediate savings. If you want the best of both worlds, consider buying refurbished office equipment, as well. Second-hand has a bad reputation to some people but refurbished digital equipment is rigorously tested to ensure that it’s fit for purpose before purchase and often comes with a warranty. Otherwise, consider looking at second-hand office furniture, as well, to cut some of those costs.

Switch up your suppliers
Besides the one-time purchases you have to try and get a good deal on, like digital equipment and furniture, there is also the supply of goods that any office needs to keep running smoothly. In most cases, we’re talking about office materials like paper, stationery, printer supplies and the like. Your supplies may differ, but the strategy remains the same: don’t buy them at retail. Instead, getting cost-effective resources like cheap ink cartridges is all about finding the right supplier. You local printing store might be willing to negotiate a deal for a business account but if they’re not, you’re better at looking online and buying in bulk from industry suppliers.

Image Source: Christina Morillo

Rethink your hiring
One of the easiest ways to see your costs climbing way too high is to hire a new member to the team without the necessary consideration. Besides their pay, every employee comes with a lot of added cost. If you get over fifteen employees, for instance, you will find that providing some benefits becomes mandatory. What’s more, too many business owners employ people without really having enough work to justify creating that role. Instead, look at the possibility of outsourcing some of your workload. You get the benefits of hiring a professional, without all the hassle of going through recruitment, and the added pressure on your HR system. What’s more, you can consider making existing roles more streamlined by systemizing processes using things like automating software so that you and your team can get more productive, eliminating the need for another hire in the first place.

Balance your marketing
Almost all businesses are marketing in the digital world these days. It’s undoubtedly the most effective way to reach the largest audience possible. However, it’s not always worth the money. In particular, digital advertising might not be the most cost-effective way to use your advertising budget. Look at the differences between inbound marketing and outbound marketing. Outbound marketing, like advertising, involves paying a lot of money for a lot of short-term gain. If you’re not running a special sale or a launch event, you shouldn’t spend on short-term gain. Rather, inbound marketing, such as content marketing and social media marketing, costs a lot less (it can be entirely free if you’re willing to put the time into it) and lasts a lot longer.

Spend your energy wisely
When is the last time you took a real good look at your utility bill? Besides switching up your internet or electricity suppliers, the most effective way to reduce those bills is to reduce how much energy and water you’re using in the business. If you can handle the short-term expense, consider hiring a team to perform an energy audit. It’s an immediate cost, but it can highlight all the ways that your business is wasting energy and the policies and practices you can put into place to reduce that waste. Besides hiring an energy audit, there’s plenty you can do to reduce energy use yourself, such as installing LED light bulbs, ensuring that all digital equipment is turned off, rather than on standby, at the end of the day and such.

Image Source: rawpixel.com

Take a chunk off your taxes
Most business owners don’t know the full range of tax deductions that they could be entitled to. You can deduct gross receipts tax, payroll tax, sales tax, gasoline tax, and much more. To be eligible for a deduction, expenses have to be solely for the business, however. For instance, a home business owner might not be able to deduct the full cost of a new PC if, for instance, they also use it to stream movies or have other personal uses for it. If you want to make the most deductions without getting the ire of the IRS, it’s recommended to work with a qualified accountant.

A careful balance has to be struck when it comes to cutting costs in the business. You want to free the money you need to reinvest and to grow the business, but if you end up cutting too much, it will impact your services and your customers could turn against you. Scale costs responsibly, starting by reducing instead of cutting and with the most unnecessary costs first.