In a few rare moments of downtime, I was flipping through TV channels when I happened on Suze Orman. I paused to watch a bit, and her words were profound. She said that financial freedom today achieved by getting more pleasure out of what you save rather than what you spend. While Suze was talking about personal finances, I immediately thought that the same principle holds true for businesses as well.
Set your goal to find reward in the money and resources you save, rather than what we spend. Here are seven ways to get it done:
1. Barter. You need business cards printed, and you’re willing to trade your web development expertise. While bartering used to be limited by your ability to find someone who needs exactly what you have to trade, websites like Tradeaway, OurGoods, and InstantBarter have simplified the process and broadened your scope. Dollar values are applied to your products or skills, and you can trade for credits within the site. It’s important to remember, though that time is money, and it’s important to get fair value for your time.
2. Buy used. Anything that you purchase new begins to lose value as soon as it belongs to you. Do your homework and find lightly used products whose history you can learn. Whether you research a used car’s VIN or whether you call a manufacturer to see if they’ll honor or even extend an original warranty, a little homework can make your used purchase better than new in terms of value.
3. Buy generic. We’re not just talking about antibiotics. Brand names confer confidence, but not necessarily better quality. You may find that you’re better off paying for an inexpensive, highly rated printer, rather than a printer with a fancy brand name whose biggest claim to fame may be its reputation for excessive maintenance costs.
4. Borrowing. If you carefully assess all the equipment your business owns, you will discover that much of it is used infrequently. Do you really need to buy expensive camera equipment, or can you borrow it for the three occasions each year when you really need it? Particularly for big ticket items, finding a friend or even a staff member who’ll let you borrow a box truck or a 200 person tent once or twice a year lets you spend your money on the things you use every day.
5. Leasing. Formalized borrowing. Short term leases make perfect sense for items used occasionally or items you intend to replace in the short term. If it’s important to you and your clients that you have a late model car (and you put limited miles on that car) then a lease is perfect. You always look current, and your expenditure over the term of the lease will be lower than if you’d bought the car. Expensive copiers and phone systems, too, may be cheaper to lease – particularly if you can negotiate to have maintenance included.
6. Sharing. It’s not just for kindergarten anymore! When you think about how the 80/20 rule applies to office space, for example, you realize that if you share common spaces – conference rooms, restrooms, kitchen space – you can share out the expense for those important, but infrequently used, spaces. Find businesses with similar needs, and find ways to share common resources. Spend your money where you spend your time.
7. Just wait. Time can be your best negotiator because buying is frequently tied to emotions. Think about the bright red sports car as a personal example, and think about its business corollary: the newest, shiniest office equipment. You’re thinking about how good that new espresso maker could be for office morale; you’re imagining your staff’s delight at a round of Herman Miller Aeron chairs for everyone. Stop. Give yourself a few days to think the purchase over, and that excitement will wane and let you make business decisions with a clear head. If you wait, you will get things more cheaply.
Buying is drenched in emotions, and Suze Orman rightly identifies this emotion as one of the factors that can keep us from making the very best fiscal decisions. We need to change our thinking. We need to learn to see the value in money and time saved, rather than in money and time spent.