Ways to Minimize Personal Expenses in Order to Maximize Business Profit
A frustration with many entrepreneurs is that they still have to take care of themselves. They must still pay for things like housing, food, transportation costs and more. And despite best efforts, there are few ways to get these expenses at least tax deductible.
Now, when Elon Musk and his brother were building PayPal they actually didn’t have the money for an office and an apartment so they forewent the apartment and slept at the office. They ate hot dogs, oranges and showered at the YMCA. Though if you’re not willing to go that hardcore, the following article is for you. Let’s get your personal expenses low so you can channel the most money into your business as possible.
We all grow up with a certain lifestyle. We do a lot of things the way we do because that’s how we grew up. For instance, we may only buy name-brand products. Or we may think a car is old after three years. Ideas like these need challenge if you’re to put as much money into your business as possible.
Challenge every expense in your life. If you’re paying too much for housing, consider downgrading to a more efficient living space. You’re probably not sleeping much anyway. Consider biking instead of driving so much. Exercise helps with your creativity as well. Try buying generic brands as well. See how long you can go without shopping for extras like movies, gear for your hobbies, etc. It’s also wise to challenge the bills you’d like to keep: things like your car insurance and cell phone. Call each company and see if you can get any sort of discount. Hint that if you don’t get a discount, you’ll have to look elsewhere. There are lots of new and innovative insurance and cell providers. Consider them before sticking with your expensive plans.
Now that you’ve challenged everything, there’s probably a lot of stuff you have lying around. To have more cash for your business, sell everything you’re not using. Craigslist is great for most things. Though if you have a specialty item wherein you need to reach an audience of enthusiasts, head to eBay. But make sure you don’t spend more time listing, packing, shipping than your time is worth. IE: If you’re earning $30 per hour (essentially) building the company, don’t spend an hour listing a $15 item. Donate it for and get the tax benefit or just give it to a friend. You can keep it but as the saying goes… a cluttered desk is a cluttered mind. It’s best not to keep too much around when starting a company. It can cloud the mind.
Divert All New Money into Business Accounts
Your spending is under control. You’ve sold what you can. Now, to keep things moving forward, make sure your new money goes into business accounts. That will keep your personal accounts from filling up and give you the dangerous feeling of needing to empty them. You may also want to consider slowing down your contribution to retirement plans. After all, you can make much more money investing in your business than in the stock market. Most investors assume the market will return 8% per year on average. You can do much better in business for yourself.
You’ll Get It All Back
Don’t worry about the sacrifice. Instead, don’t even look at all of this as a sacrifice. Look at it as investing instead in the right areas of your life – your business. Your future. Your long-term happiness. And you’ll get the money back anyway so any stress you feel is only temporary. Just remember to work hard so everything comes to fruition. Elon Musk now lives in a mansion.