What’s one unusual or surprising thing you’ve done to save money or improve cash flow in your business?
The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
“Provide discount opportunities to customers who pay in full upfront. As an example, if you offer a SaaS solution, encourage customers to buy 1-3 years of your service.”
– Andrew Fayad, eLearning Mind
“When you’re starting a business, don’t spend cash on nice desks, chairs or lighting fixtures. Spend your money on advertising; don’t deck out your office. Another tip: we now pay $60 a month for purified water dispensers instead of $1000 a month for water bottles. Same with hardware — we didn’t buy Thunderbolt displays on day one. Until you have enough cash flow, be basic and buy minimally.”
– George Bousis, Raise Marketplace Inc.
“Merchant accounts are a very competitive industry, and shaving a tiny fraction off your rate will save you thousands of dollars over the course of a year. I recently gathered competitive quotes and took them to my merchant account for a match. Not only did they lower my rate, but I was able to get same-day deposits by using a provider that partners with my bank.”
– Laura Roeder, LKR Social Media
“We’ve been working with an awesome manufacturer, the Berkeley Sourcing Group, since 2011. Recently, we took on a license with Major League Baseball. Baseball teams have onerous terms, so we don’t get paid until 45 days after we deliver the product! I shared this with Greg, the CEO of BSG. He aligned the entire payment process to match our client’s terms, helping both of us.”
– Aaron Schwartz, Modify Watches
“Sign up for the rewards program at your local office supply retailer, then sign up for email updates and wait for a 100 percent cash back sale. Buy the listed office supplies, then get the total purchase amount (minus sales tax) back in the form of a rewards certificate.”
– Andrew Schrage, Money Crashers Personal Finance
“Our favorite charge card is the American Express Plum card. We have a huge balance (charge cards traditionally have much larger limits than credit cards) and get 1.5 percent cash back for purchases paid off in full within 10 days of statement closings. So far this year, we’ve gotten more than $20,000 in cash back just from paying our bill! It’s an awesome way to improve cash flow with almost no effort.”
– Brittany Hodak, ZinePak
“Most consultants or large-scale laborers bill too infrequently. No more is at the beginning and at the end good enough. Instead, set milestones and payment rewards incrementally along the way. For larger projects, these could exist at every 10 percent. Smaller projects can stick with three to four payments. It still feels more exciting than only being paid twice.”
– Logan Lenz, Endagon
“Consider compensating your employees on a commission basis. This allows both the employer and the employee to participate in the upside, but removes some of the burdens of a traditional payroll. This has increased revenue for my firm and improved cashflow.”
– Matthew Moisan, Moisan Legal P.C.
“Bills were due and we were having a tight month. I had to cut costs somewhere. I found that insurance was a large part of my company’s expenses. I shopped around to find that we were paying almost double what others were asking for insurance monthly premiums. We got better insurance at almost half the cost. It’s totally worth shopping around for all types of insurance.”
– John Rampton, Adogy
“We recently left our startup incubator to move into our own office in downtown Baton Rouge. Rather than run out and buy all new stuff to furnish the place, we’ve turned to thrift stores, yard and sales and used office furniture outlets. The place looks cool and we saved thousands of dollars compared to buying new.”
– Mary Ellen Slayter, Reputation Capital
“One of the simple things you can do is work for trade on certain projects or with certain organizations that fit with you mission and will bring you more exposure. This will help save money, while at the same time expose your brand or service to more individuals. Collaboration is king for young companies and entrepreneurs. One example is trading product for high end photos of your product.”
– Jason Grill, JGrill Media | Sock 101
“When we reached the 50-person mark and were eating cake and singing (poorly, I might add) “Happy Birthday” every week, I started to do the math. I figured out that this little ritual was costing my service business over $100,000 a year in lost revenue. So now we sing and eat once a month and give each employee a generous gift card on their birthday and everyone is happier — including our bottom line.”
– Andrew Howlett, Rain