Squeeze the Most from Every Dollar
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To spend wisely, think creatively, tap free or low-cost alternatives and tighten your fiscal discipline. It's a skill that CEOs ignore at their own peril.
Shrewd business owners know that as their enterprise grows, they must make do with less. They will scrimp and save and plow profits back into the company to fuel its development.Yet other business owners spend with abandon. After each round of financing, they start writing checks for capital improvements, real estate and new technologies. They might also sign costly long-term leases or hire high-priced consultants and executives. Although such expenditures can pay off, there's a downside: Cash evaporates quickly. Think like a miser Just because you now have a viable stage-two business, don't open the floodgates and spend more freely. Preserving what you've built takes even more scrutiny. Some good guidelines:- Appoint a "bid manager." Big corporations have purchasing departments that negotiate volume discounts with vendors and follow strict procedures in authorizing payment and approving employee-spending requests. You can reap the same benefit by naming a sharp employee as your bid manager. Whenever you embark on a sizable purchase, this person can be in charge of collecting at least three bids, negotiating discounts and recommending the "best buy."
- Set a thrifty example. Point out to employees how you save money to benefit the business, such as furnishing your office with used furniture or installing sensor lights to cut electricity bills. Recycle office supplies when possible. Recognize and reward workers who suggest and implement money-saving ideas.
- Hold garage sales. Let employees and their guests buy your firm's outdated equipment. Make it a fun annual event with music, refreshments and door prizes. This reminds employees of your mission to save money, while allowing them to nab great deals on everything from old computers to file cabinets.
- Utilize online knowledge. By subscribing to e-mail lists that address a specific topic, you can gain access to money-saving resources. Joining most of these listservs is free, and they can serve as both networking and fact-gathering tools. Say you need to find a subcontractor. You can send an e-mail within your members-only list, describing what kind of person you seek, and then collect leads from other listserv members. An example of a listserv for high-tech business owners is run by the World Wide Web Artists' Consortium (http://wwwac.org); it has more than 3,000 subscribers.
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Articles in our Entrepreneur’s Resource Center appeared in print and online newsletters published previously by the foundation. More than 1,000 articles can be found in the categories below, addressing timeless challenges faced by entrepreneurs of all types.