If there's one thing an internet entrepreneur needs to know, it's how to pinch pennies. It's not like in the corporate world when you just put everything on the company credit card--the money is coming out of our own pockets, so we've gotten darn good at knowing when to save and splurge!
Think back to your first business--did you spend money needlessly in any area? I think we all probably have :-) I remember how I was obsessed with fancy stationary, business cards, and a sophisticated phone system. I thought I would need that stuff, but I've never actually used any of it.
Jason Calicanis, who has some experience in running a start up business or two ;-), has a great post called How to save money running a startup . He has 17 tips, and I've picked the top 9 that I think really apply to virtual business owners.
Here they are...drumroll please:
9. Buy Macintosh computers, save money on IT repairs. I can vouch for this--I started off with a PC and recently decided to shell out the extra dough for a Mac. I have found it to be a very worthwhile business investment. I would also add to get the extra large monitor (easier on the eyes and lets more windows be open at one time)
8. Buy cheap tables/desks and expensive chairs. Jason says his company buys stainless steel restaurant tables for a bargain and then splurges on fancy chairs. I agree--if you can get a used desk or table, go for it, but do not skimp on your chair. You're going to be sitting for most of the day, so it's important for your health that you have excellent back support. If you feel guilty spending $600 on an Aeron chair, remind yourself that if you are comfortable and ergonomically correct, you will work more efficiently and have fewer back problems.
7. Don't buy a phone system. Good point--whether your company is
a solo biz or has multiple team members, a phone system is usually
obsolete. Everyone has a cell phone, and everyone communicates via chat
and and email. A small internet business can usually get by without an elaborate phone set up.
6. Use Google Docs instead of buying Microsoft Office. MS Office costs about $300 for a single user, and that's a big chunk of change. Google Docs and Spreadsheets, on the other hand, are free. Using Google Docs and Spreadsheets also allows for easy online collaboration.
5. Use Google hosted email. It's free! Also, most ISPs offer free email along with internet, so that's another option for the solo entrepreneur who works at home.
4. Invest in a high quality, automatic espresso machine. I can agree with this--I did get the fancy coffee machine and bought Starbucks beans. It saves me money (so much cheaper than going to Starbucks) and time. On the flip side of this, if you're a stay at home web worker, sometimes it's a real treat to make a trip out to the coffee shop. At least you get to interact with human beings during the workday. :-)
3. Assemble a virtual team. My reasoning on this one is different from Jason's (he and I are writing about different types of businesses). I think the main reason why enlisting the help of a talented virtual team is a great business investment for an online business owner is that 1) Sometimes there is no one in your geographical area who specializes in providing the type of help you need 2) You don't need to provide office space or office equipment, or benefits, so you save a good chunk of change there 3) If your virtual team is comprised of other independent business owners (rather than employees), there is no need to micro-manage anyone--everyone is a professional and just does their part 4) Outsourcing work frees you to spend more time to focus on growing your business and coming up with money making ideas.
2. Don't rent office space. Most virtual businesses can be headquartered from home, with a virtual team who works from their own homes. A variety of online collaboration tools make it so that it almost feels like you're in the same room, even though your team may be on different continents. (Of course if you're a seasoned virtual entrepreneur, there are also great reasons why you might want to rent office space)
1. Blog instead of hiring a PR firm. A blog is relatively cheap, and is an extremely effective way of bringing exposure to your company (not to mention that a well-tended blog can be used as a leveraging tool to help boost the search engine ranking of your product site). It sure is a whole lot cheaper than spending $15,000 a year on PR firm services!
Anyone else have money-saving tips for running an internet business? Please share your wisdom!