Basic Principles - 7 Ways to Reduce Your Overhead

Any project costs money. I’ve learned this… and perhaps you have, too. Nothing is more frustrating to an entrepreneur than a great idea with no funding. Here are seven ways you can squeeze your wallet to get a little extra juice to fund your small business venture.

• Cut your rent - Housing is everyone’s largest and most pressing expense. You’ve gotta live somewhere. Have you thought of taking on a roommate? Newly professional poker players share houses together while they scrape money for the buy in… it’s intelligent, because they get to practice playing together, too! Or find a job where housing is included in your salary, like an apartment or resident hotel manager. Lowering your housing expense can be difficult, but the possibility of freeing up an extra $300-$800 a month can make it more than worth the trouble.

• Buy used - Keep money in your wallet by being frugal with what you spend on lifestyle. Used cars are a great way to save $10,000. You can find name brand clothes at second hand stores, especially if you live close to a college or university. These days, you can even troll Google for free MP3’s instead of paying 99 cents a pop for your favorite music, or watch television shows online to avoid costly premium cable subscriptions.

• Lose your vices - Cutting down on tobacco and alcohol can save the average heavy drinker and smoker over $3000 a year. Besides, it’s unhealthy. Your business and your health are worth kicking the habit.

• Look for coupons - How would you like to cut 15% off your total grocery bill? Using coupons, a family of four can save about $700 a year. Coupons can be found in newspaper inserts, magazines, supermarket circulars, and in-store coupon dispensers. Some products even have coupons printed on the packaging itself.

• Minimize transportation costs - Driving to and from your place of business is a daily expense. If you drove less, you could save on gas, parking, maintenance, and repairs. You may even qualify for a low-mileage-driver discount from your auto insurance company. Consider carpooling, walking, or riding a bike.

• Claim more allowances on your W-2 - Talk to your accountant or tax-preparer before you do this… but you can claim extra allowances and file less out of every paycheck towards your yearly income tax payment. If you end up using the excess to start or fund your business, it may be deductible at the end of the year, anyways. Be careful, though… if it ISN’T deductible, you’ll be responsible for regular payment for your usual income tax bracket. Ask for help on this one.

• If you own a home, refinance - Consider refinancing your mortgage if you can get a rate that is lower than your existing mortgage rate and you plan to keep the new mortgage for at least several years. Calculate precisely how much your new mortgage (including points, fees, and closing costs) will cost and whether it could cost less than your current mortgage in the long run.