Let’s face it– as entrepreneurs, we’re always looking for ways to save money without compromising on quality. This week, we discussed small changes that can have big savings– read on to see the tips we came up with the help of our audience, members, and guests like Gary Henderson and Thomas Campbell, CPA.
If you’re doing something, why wouldn’t you have the vision that it’s going to be wildly successful?
Top 5 hacks:
- Join an incubator or accelerator program!
Colin’s first tip for most aspiring entrepreneurs– take advantage of the resources that want to help you! Check out innovation centers/accelerator programs or incubators in your community for networking opportunities, mentorship and professional guidance, and much more to help you in your business’s early stages.
- Keep an eye on your subscriptions.
Recurring charges can end up costing you big time annually! When starting out, you might try several platforms to simplify your business’s day-to-day, but once you find the programs and services that are worth the cost, cancel the others to avoid needless expenses.
- Get ahead of potential obstacles!
Tom stressed the importance of proper strategic planning and forecasting and having a general understanding at all times of the company’s financial status. Conduct ‘variance analysis’ by asking the What if? questions to plan for future business setbacks.
- Don’t forget about your existing audience!
In pursuit of new customers, don’t abandon the ones that have been there since day 1– they’re the ones that have always seen the value in your brand. Consider leveraging loyal customers for effective, lower-cost marketing campaigns.
- Ditch the Board of Directors
…for an advisory board instead! Discuss and plan with local business leaders and peers, who can offer specialized and strategic advice and opinions, but be aware of the differences in job descriptions and limitations.
This is only a handful of the great advice shared from our audience members and special guests– catch the full session above for all 27 tips!
Serial Entrepreneur Club – EP66: 27 Cost-Cutting Hacks for Your Business
What are ways we can grow this startup without spending as much money?
Uh, the fact is startups don’t have a lot of money. They’re not run like big corporations are run and they have to be very tight with their, their money. And you may have some hacks or tricks or tips that you wanna share with us. So, so please, if you’re in the audience, raise your hand, this is an open mic today we’re gonna have, um, you know, let’s hope we get 10, 15 people on stage.
We’re trying to come up with 27 ways that startups can save money. Uh, I also, if you could do this as well, even if you don’t choose not to come on stage, uh, you can share the room with, uh, others who might be interested in this topic. You’ll see right at the bottom, there there’s a button. I know Michele and Jeff will share the room.
I’m doing it right now. Share via clubhouse and you can actually share the room. So that’s something else you can do [00:01:00] as well. If you don’t want to come on stage, but still wanna ask a question, feel free to use the back channel oxygen. That’s what we’re talking about today. And when a business starts to run outta cash, it’s like the oxygen is leaving.
The room. Breathing becomes more difficult. You, you, you begin to gasp for air. You begin to focus on things that make your next breath happen, period. And ignore the rests. That’s exactly what happens when you run outta cash with a startup, your stress goes through the roof. You’re about to default on payroll.
So you do whatever it takes to keep breathing, maxing out that credit card, signing high interest rate loans, slowing down supplier payments, cutting key staff, personal guarantees, doing whatever it takes to survive, but could actually prove pretty expensive because you’re focusing on the wrong things in a startup.
You’re not focusing on generating new revenue or signing up new customers. Um, you’re not focused on the needs of your [00:02:00] employees, uh, and you’re actually digging a bigger and bigger grave. And I can’t tell you how many startups I’ve been involved with. Um, who’ve, uh, been a great company, great people, great idea, but just simply ran outta cash and had to, you know, had to shut down.
And I know, you know, one of those examples is we bought, we bought a company in receivership. And they had, it was an e-commerce company and they had a credit, a payment program with Shopify and Shopify. Like I, if you ever listen to me, I’m a big proponent of Shopify, but they had, um, an interest rate payment that when we calculated, it was effectively like 80% interest because it was paid every, every, every week.
And when the, the, the, the black Friday sales hit in the, in the, in the, the holiday sales hit, essentially wiped out the, the, the interest payments, which, uh, effectively was something, it ultimately was like something like 60, 70, 80%, you know? So when a company gets into trouble, it, it, it [00:03:00] needs to figure out ways to get outta that hole without digging a bigger hole.
And so, you know, my first idea, actually also, I’m gonna hold back. I’m gonna let Michele and Jeff come up with some of their idea, wanna hit 27 you’re in the audience. Please raise your hand, come share with us. We’re just having fun here this Friday afternoon. Jeff. You want to give us a couple ideas? I got like six.
Okay. That’s it. So we gotta come up with, we gotta come up 21 more for our blog and these are ideas to save money, right? Yeah. So it could be save money or a more efficient way to grow. I mean, I it’s a startup. Right. You know, you’re yeah. You know, you’re just starting up mean. The one idea idea I had like right away out of the gate was join an incubator.
And I do a cohort over here at NSU, um, with the a Levann innovation center. And I was there this week. We did a session on, um, it was the opening session for the cohort. And [00:04:00] I heard at the end of it, she mentioned to the, uh, the participants who are joining this cohort, by the way for free, we all love that as a startup, don’t wait free.
She mentioned that you can get a desk in this building, and this is a phenomenal facility for $85 a month. You’re making connections. You. You have an office. I mean, I don’t know what it costs you to get an internet connection and to get the alarm system security and maintenance and pest control and cleaning costs, power and water and insurance.
These are a lot of things when it comes to an office. So best way to save money, I think is join one of these shared office facilities. Jeff. So a shared office facility is good. An incubator is good, but I think, you know, one thing is to be careful about is not sign up for too many subscriptions. Right? I think one of the things, you know, especially early on, there’s all these different [00:05:00] services and platforms we can use to get started and we sign up for them all, you know, and they could be.
You know, different platforms to help you create content. It could be, you know, things like, you know, Canva and Animoto and everything else. And when we’re starting out, we sign up for all of these and then, um, end up only using a handful and forget to, to cancel those subscriptions. And before, you know, it, you might be spending a thousand dollars a month or more on stuff that’s not being used.
So, so be careful which services you sign up for and make sure you’re auditing and only paying for the ones you’re actually using. True story. I’m driving up north. And I figured I had to go on the iPhone and watch all your subscriptions. Uh, I asked my wife to do it. She opened it up, there were 39 subscriptions.
There were subscriptions for like QR code readers, multiple times that she was paying for everything. So just write on your iPhone. It’s very easy to manage as well. I know we got Gary here. Well, this is exciting, Gary. Um, [00:06:00] we’re gonna jump to sorry, Michele. You’re up next, right? So we’ll do, do you next, Michele?
And then. But really excited to see you there, Gary and Tom. Yeah, absolutely. So, oh my gosh, this is such a rich subject. And one of my favorites actually, because it’s all about, I don’t think of it like, oh my God, we’re in trouble and we’re cutting expenses. I think it really is also a lot about how do we focus on what is actually working as well as really prioritizing and you know, the savings go far beyond.
I’m gonna say monetary when you do those kind of exercises. But since this session is, uh, specifically about 27 hacks to save money, I’m gonna save a few savings. So one that I think is amazing is, you know, think about [00:07:00] if you have servers. um, you know, developers, software, whatever it is, think about going to the cloud, like there can be a massive amount of savings.
And, uh, so that’s one think about going to the cloud, not doing everything in house, which also kind of leads into, you know, where can you use offshore? Maybe it’s not offshore, but where can you not hire? Like for us? Um, you know, we love our, you know, adjunct folks that are in, for example, the Philippines and India, amazing people.
And, and the fact is, is that we save a lot of money there as well, but we only do it. If it works for the business, we’re not doing just this stuff so that we can say, oh my gosh, we saved all this money. We’re doing it because it actually works and it works better. Yeah. And you actually had an employee leave and she was about 60,000 a year [00:08:00] and you replaced.
Can you tell us that story? Yeah. I mean, I have had amazing experiences, you know, which I could go on for hours about, but, um, yeah, I had a very talented, um, creative director that worked for us for many years. She decided to make a change. And so I thought, oh gosh, after talking to some of my friends, norm, et cetera, and they were like, you know, you might reach out to the specific agency, multiply me in my eye in the Philippines because you know, there are some very talented young people which I did.
And I actually ran a very, um, systematic discipline process. And we found the most amazing young lady that is, you know, blowing everybody away. That’s um, you know, like, you know, a creative graphic artist, but what I say there is when you do this. Set ’em up for success. Like you got to be engaging in managing and [00:09:00] supporting.
Otherwise it’s not gonna be successful for us. We’ve had a huge amount of success, not just monetary, like I said, it’s great. When you can look through it lens, it’s not just monetary, but it’s also good for the other employees and it’s good for the company. So I said, clouds, I said, um, outsourcing, and then I’m just gonna say, you’re done.
Hold off, hold off, hold off. You gotta give us, you gotta other some chance here. Okay. Gary, Gary’s like doing the dance. I love the subject and I, I don’t want Gary to leave Colin. Okay. But he’s doing the, so to Gary, he’s very eager to, to, to share with us savings. All right, Gary, you’re up next. Oh, thank you.
Thank you. Thank you. Um, you know, I second what Michele says. I met my co-founder here on clubhouse tests and he’s in logos and we have 17 full-time employees that work with us now. They’re based in logos and I pay them in cryptocurrency, out of my Gary coin that I created. [00:10:00] So for me, saving was looking at, at kind of the world differently and saying, I’m gonna operate globally.
So I don’t have to hire locally. We’re powering 35 creator communities right now with their own cryptocurrencies. So as I started to hire, I went to the locations that made the most sense. I hired a team. We provide a service that I would never be able to provide. If we were, you know, hiring everyone in the us, we have 24 7 concierge that work in my discord server 365 days a year, but I’m able to do it because we look globally because we serve global clients and then, you know, creating my own currency.
I live in Puerto Rico. We operate on a us dollar, but everyone in the world doesn’t operate on a us dollar. So I had to break down in my [00:11:00] mind. I’m not gonna make the world operate on my currency. I’m not gonna go operate on their currency. I’m gonna create my own currency. So I’m not gonna run on us dollars.
I’m not gonna try to run on whatever currencies in other countries. I’m just gonna create my own currency and I’m gonna operate on my currency. And I use it to pay vendors. Like I just hired a video crew to film an event that I’m running in August. And I paid them 5,000 us dollars, the equivalent of that though in Gary coin.
And they immediately hit the button and converted it to salon and probably took it to their bank account. And that’s cool. That’s what they needed. They needed money. That’s okay. They could have held Gary coin. So for me, it’s it’s, if you’re going to operate globally, Then look globally, finds your talent and pay them a, a nice affordable wage wherever they are, whatever they ask for.
And then if you can, if you’re operating globally, create your own currency, because then you get to drive the demand and drive the value for it. And you can use that. There’s no reason to make everyone operate [00:12:00] on your government’s local currency. So I I’ll pause there. Yeah. But I think Gary, like one thing about you is you are really first you’re phenomenal speaker.
And second of all, you you’ve created like a vision for Gary coin. And I think every startup, you know, that creates that vision. Like you, people are attracted to Elon Musk, they’re attracted to Gary club, they’re attracted to, you know, these successful startups and they’re willing to do things for these startups that they, that they wouldn’t do for a fortune 500 company.
So I, I just, can you just talk to that a little bit? Like, how do you create this vision? I mean, your. There’s a lot of us in the audience or think even I’m thinking like, how can I ever pull that off? What Gary just talked about? Well, you just, I mean, how couldn’t you pull it off? Like if you’re doing it, why wouldn’t you have the vision that it’s going to be wildly successful?
Like Geno in my community. He’s 27 years old. He lives in the Netherlands. He launched a community for like, it’s called the [00:13:00] drive coin it’s car enthusiasts. And he went and he spent 2000 drive coin and he bought a car with it to remodel and work on TikTok videos. He took 5,000 drive coin and sponsored a NASCAR car.
And Dale Earnhardt. Jr’s retweeting the car with Chino’s logo. There it’s all with his own currency. So to me, if you’re gonna create something, if you’re gonna build something, why like you all believe then.club when you created it? You had passion, like you were there, you were like, you were all in before anybody else was all in.
You were the ones that everybody was probably looking at crazy. So how can you like to me, if you don’t feel that then you might, should look at something else or maybe go help someone else? I think there’s a lot of people that are trying to build something, but they would probably be better building with others rather than just building on their own.
So [00:14:00] maybe that’s a great way to save money is have less startups and have more collaborations or more cohorts of people building together. No, that’s awesome. Uh, Gary, great, great style. I never would’ve thought of that. I mean, you’re thinking out of the box, you know, I think that’s what every startup needs to do is to think out of the box.
And, uh, again, if you’re in the audience, you’re interested in coming on stage and sharing with us a tip or a trick or a hack, please raise your hand. It’s Friday afternoon, we’re here to have fun. We’re here to figure out 27. Uh, hacks so we can put them into the, uh, blog that we’re writing on this topic. I know Mimi’s in the audience there.
She see, uh, she works very hard at, uh, startup.club. You can go there and you can see in many of her blogs, all of the recordings, it’s a phenomenal database of shows, et cetera, et cetera. And, uh, she’ll be writing the blog 27 hacks to save money with your [00:15:00] startup and, and today’s environment too. It’s not easy with the inflation and surging container costs and recession and everything.
Well, we have another gentleman on stage, Tom. I know he’s not quite a crypto guy, but he is a CFO and I asked him to join. He, he has some experiences he’d like to share as well. Tom, the mutes in the bottom right corner. I know you don’t often come on clubhouse. There you go. Hi. Hello everyone. Yeah. As an accountant, a CFO, first of all, I, I like to say for cost cutting.
I, I support it fully, but isn’t that funny? Cause you work at lot of startups, right? Cuz she’s in the incubator here and you, you see this, all the startups are focused on driving revenue, driving sales, driving sales. Nobody seems to be focused on the other side of the equation. And, and this is, and this is kind of where I’m getting at.
This is my first thing. Here is as an accountant, I tend to be [00:16:00] more to the detriment of cutting too much cost. Whereas you have marketers and all that that want to spend, spend, spend. So one of the things with cost cutting is having a well balanced executive team that works together really well. You wanna have, you don’t wanna have somebody who just wants to spend, you want, you wanna have that accountant that kind of says, you know, whoa, whoa, we’re spending too much money.
Sort of keep everything in check. Know, to keep the checks and balances because together United you, one plus one is equal to three, as opposed to just one person going, oh, let’s spend here, spend, spend, spend. Right. And another thing that is very important with cost cut believe is, is actually strategic planning
and forecasting and getting your forecasting correct. And being able to adjust quickly. So not only just doing, doing the, the planning things properly and correct correctly, but [00:17:00] also, um, putting in, putting in variance analysis. What ifs, what if, what if, um, we go into recession? What if you know, there’s a war in rush?
Well, I, no one would’ve predicted that one, but, but you gotta be prepared for certain changes in. Environment and by, by doing projections and being able to just be able to say, okay, we’ve ordered inventory. Our inventory is higher. Let’s pull back on inventory, you know, quickly, but, and by following up on your projections to say, okay, monitoring those projections.
Okay. We’ve ordered X amount of inventory. We’re we’re way over. Okay, let’s pull back on it. Let’s pull back on it. Cause they believe, believe it or not. Today, companies used to, a lot of the big retail companies used to carry a lot of inventory into the new year. Now they’re actually stocking out. They wanna stock out.
That’s why you can’t buy. If you go shopping for C at Christmas for something around December 23rd, you [00:18:00] can’t buy it because companies aren’t restocking it. They, they they’d rather, they save more money stocking out than they do carrying that inventory over into the next year. So it it’s, it’s proper planning.
Well, you don’t wanna stock out either. You’d rather give cuz you’re losing money there too. So it just on time, right Tom. Yeah. You wanna get, you wanna make an, if you can get your inventory rate to zero, right at the end of the year, that’s the perfect scenarios. So it’s really proper forecasting and planning and being able to adjust.
So it’s monitoring, not just doing the planning and the forecasting, it’s monitoring that planning and forecasting to make sure it it’s meeting its objectives. At all times. I, I, I love what Tom is saying here, Colin, and by the way, um, Tom is an expert analysis, you know, modeler, but he’s talking about getting in front of it, right?
Like, so we’re not like, oh my gosh, we can’t meet payroll. What did we do [00:19:00] properly? And how are we running the business? So that’s some great input, Tom. Okay. Yeah, no, I mean, we’re talking about e-commerce businesses here. We all have firsthand on this one and we’ve been merged pretty bad over the last year and a half, but one of the things we learned the most is test, test, test, and then scale in tens, you know, test a hundred units and then scale to a thousand test that and scale to 10,000, uh, units.
And, and that seems to, uh, be a better model than just gambling and assuming it’ll happen. Uh, the other thing that you made me think about Tom was. One of our culture statements in our, in our, at Hostopia. And we got up to about 600 employees here, but one of the, the value statements that we had was we spend it like our own.
And so we wanted everybody in the company to be thinking about cost management, cost containment, and to not be wasteful. You know, that’s the one thing that we really did not want is to [00:20:00] have you become so big and bloated and, and whatnot, and then you become wasteful. And I know when you spend it like your own, there’s definitely a different mentality and just setting that mentality within the organization.
All right. Great. Dan, we have you on stage. Wait, wait, we got a Drexel. Oh, on, on, on mine. Mine has got, got Dan and then Drexel on mine, PTR. Okay. So, okay. So Dan, we got you on stage next. Uh, you look like you’re connected with Gary. Some reason I’d like to hear that story, but Dan, do you have a tip or trick for us on.
How to save money with a startup and mute is on the bottom. Right. But I think, you know, it know about that. And if Dan you’re not ready yet, let’s just jump to you. Jel you’re up Jel. You have its chance to, uh, share a tip with us here on how to save money. Thank you. Well, I think he’s here. He’s here right now.[00:21:00]
Hi. Uh, I’m sorry. I’m driving and I, I just have a lot of calls coming in. I’m Jile thank you guys for bringing me up on stage. Uh, and so everybody else that’s spoken. Thank you for the, um, information, uh, for me, um, I, I, I, I have two startups that are working simultaneously on and, um, I use, um, the, the, I would say use, I, I, um,
Right. Um, so I look for people that are interested in the things that I’m working on and, um, I, I bring them on as an experience or as, um, uh, something that they can use to maybe eventually be a part of the team when they graduate. So [00:22:00] that’s, that’s like one of the things that I do. Um, but of course, making sure that, uh, I, I make it what they want because you, sometimes you see that there’s some students that already have the knowledge and experience of certain things, but because they haven’t graduated, they’re not going to, uh, be hired somewhere.
But when you present them with an opportunity to practice what they know, um, it kind of be, it benefits you and it also, um, It benefits them as well. So that’s one of the ways that I can think of, um, I didn’t plan to speak. So, and I’m driving. I would take a little bit more time for me to Jackson. You know what, I think that’s a great hack and it should be one of the top ones, right?
Like hire smart people that have potential, even though they don’t have necessarily [00:23:00] the, um, experience or a big resume. Right. Like that is, I think that’s so smart. And, um, it’s really a great way to, you know, present a good, you know, should I dare I say a cliche win-win situation for a young person or maybe not young person, but for somebody who really wants to come in and work and it’s good for them and it’s good for you.
Great, great item. Thank you. Yeah, I was. At the, on the cohort that I was working on this weekend, there was a lady there who had two employees, interns working for nothing, helping her design, her software. And, uh, I just thought that was, that was amazing. Um, with the idea that obviously if, if she became commercially viable, she would hire them as well.
So that’s a unique one. I think that’s one that we don’t often tap into, but really connecting with local colleges and high schools. Even, we actually had another person of same [00:24:00] cohort who told me they hired somebody from high school. So we don’t wanna forget high school students as well. I would just want you to be careful there I had at, and this was years ago, but at my first company, I did that exact same thing.
I hired someone that was in college as an intern, and I agreed to pay them an amount of money. And I agreed do, as we became more commercially viable that they would get hired. And at the end of their internship, we signed all the documents and then they decided that they were going. Sue me with the department of labor because they wanted all of the other money that I had given them, or I had told them that I could give them if we got commercially viable, even though we never reached, like reached the commercial viability and the department of labor sided with the other person, because I didn’t have all of my ducks in a row whenever I put my contract together.
So if you’re doing anything with anyone and they’re doing it for free to save you money today, and you plan on becoming commercially [00:25:00] viable, make sure you take the time to get all your ducks in a row because it’ll be extremely expensive in the future. Crossing those Ts, doting those eyes. When you do it early on, it saves you money down the road.
I don’t know if we could add that one to the list, but, uh, I think, I think it qualifies, um, All right. Anyone on stage, we can go popcorn style here. If you wanna throw in another idea, Jel, you got something. Yeah. Um, I mean, of course you’re gonna have an agreement and, um, you may not necessarily. I mean, I don’t, I didn’t quite hear everything that they said what Gary said, but you’re gonna, you’re gonna have an agreement and you’re gonna make sure that everybody understands what they’re getting into just to avoid, um, future problems.
Yeah. But a lot of times to save money as a startup, you don’t do all the proper agreements. You don’t spend all the right [00:26:00] money on the attorneys. You don’t do everything that you would do if you had a lot of money because you’re trying to save money. Yeah. Yep. But then you become successful. Then you get into a bit of issue because you should have taken and spent the money.
You didn’t have it. So then you become successful and you’re like, oh man, because now it’s a big. Now someone says, oh, you have a lot of money that happened with like another business. I I’m trying to avoid saying names because cause sometimes, sometimes these things could be a little embarrassing, but, um, that happened with another business, uh, in our incubator where we didn’t file for the trademark.
Uh, we launched the product, we didn’t file for the trademark. And then two years later, somebody else filed for the trademark and now we’re challenging them legally for the trademark. And we should have just filed for the stupid trademark in the first place. Yeah. So I think that’s a, a big thing to bring up on, you know, ways to save money is, is worry about saving money today.
But also if you plan [00:27:00] on being a $10 million or a hundred million dollar, a billion dollar company, make sure you’re not costing yourself exponentially more in the future by saving a couple dollars today. Yeah, that’s a, that’s a, those are great tips. And also there are ways to protect yourself. Early on that are cost effective.
So when it comes to filing for patents, et cetera, you know, filing a formal patent application can cost many thousands of dollars and involve a lawyer and, and a lot of time, but there’s something called a provisional patent that you can file. And the provisional patent can be done for a few hundred dollars versus thousands of dollars.
And what the provisional patent does essentially is buy you time and gives you. And I’m not an attorney. So, you know, this is from my experience in, in doing it. So I’m not giving legal advice, but a provisional patent will give you a year. Of protection during which time you have to file the formal patent application.
So basically you can establish your invention date and be able [00:28:00] to call it, you know, patent pending. Uh, and then as long as you file for your formal application within a year, that early date, when you file the provisional patent will apply. So it gives you some level of protection and lets you start that patents process.
If you have something proprietary that you want to patent without having to shell out thousands of dollars right up front, um, the only drawback is you can’t, uh, no application action will happen until the file. Uh, the proper file is filed. So you’re not really accelerating the process of getting that patent potentially, but at least you’re, you’re putting your stake in the ground at a low cost early.
Oh, that’s, that’s a great one. Um, sorry to cut in. Um, how, how many times can you, so for example, if you run out in the first year and you need to do it again, can you do it again? No, not for that same. I don’t, again, I’m not an attorney, so check, but I don’t believe you can for the same patented application.
It’s it’s a one time [00:29:00] opportunity. Oh, okay. Well, let’s go. I, I, we got Dan on the stage here and Dan’s been patiently waiting. Dan. We’re trying to hit 27 ways to save money for our startups. What do you think, Dan?
Dan you’re you’re yeah, I think Dan had back channeled that he had some speaker problems. Oh, okay. That’s so if you have the question short enough question, you could do it in the back channel. He’s from Nigeria. Uh, big fan of gears, Gary. I read that in the comments as well. I wonder if we, giraffe is, uh, an example of a Gary fan or not, you you’ve definitely when I see a giraffe now I definitely think of you what?
Gary’s NF it’s Gary’s NFT. Well, yeah, they own the NFT. I’m teasing. I know that gaff. I know, I know what I’m saying is yeah, they’re like 500 bucks a piece. So every person wearing a gaffe they’ve at least got $500 for their profile photo. [00:30:00] So, no, that’s awesome. We do wanna stay on topic, but we should also have another session on that one.
Figure that one out. Right. Um, I have read a recent study that 63% of people in 2021 with this great, you know, the great resignation left because of low pay, 63% of people. I don’t know how they keep all these percentages work, but let’s just go with it. Okay. 63%, no opportunities for advancement. 57% of people feeling disrespected at work.
So one of the things I saying that I have, and I’ve talked to, to other startups is pay your people with love, freedom and ownership. And what do I mean by that? Um, when I talk about love, I’m talking really about recognizing who they are, um, respecting who they are, respect their achievements, um, celebrate their achievements, share their achievements with others.
Like really do a [00:31:00] much better job doing that than the fortune 1000 companies. And again, I worked at a fortune 500 company for, for many years, um, too many, um, three in total, by the way, but I never saw that happen. I just saw a very, you know, difficult culture to, to, to survive in or thrive in even, um, talk, I talk about ownership.
There are ways of sharing. Uh, doing stock options or Phantom options, or also, um, using, uh, uh, bonus sharing. So if the company does well, the employees do as well, the employees have a piece of the upside, the employees have something to gain when things go well. And lastly, we see this with freedom. I mean, we see this, um, since the pandemic, every company’s been embracing this, and I know we have one of our employees, uh, Olivia, who, you know, when she [00:32:00] first came to the incubator, she, she would pick up her son at three o’clock.
He would come and kick the soccer ball around the office and run around and, and then she decided she wanted to move. It was fine. It was totally fine. We’re cool with it. In fact, we sort of miss, uh, Matt, Matt was his name, right? Uh, Olivia, if you’re listening, but we miss, uh, Olivia and Matt in the office, and then they, they decided to move to Chicago and we said, okay, it’s great.
We love the fact you’re moving to Chicago. It’s do what you wanna do. But just stick with us. And she email@example.com as well. So that’s just an example of what I’m talking about here, because we do see, you know, when you lose good people, you lose money. And one of the best ways to save money is to not lose your staff, to keep and retain your staff.
All right. Do we have somebody else on the, on the stage? Just throw it in popcorn style. Great. Here, Michele. I know you had one. I’m gonna throw one out there. Okay. This is one that I’ve had tremendous success with is renegotiate [00:33:00] with, um, your, your vendors, your suppliers. Like, you know, you have these contracts that are rolling for years, or they didn’t quite, um, you know, with everything they promised didn’t quite come up, you know, you don’t have to go and dump ’em and be a, you know, painful thing, just renegotiate with them, let them be part of the success of the growth, push their payouts out.
Like that could be a tremendous, um, cost saving. And then on the other side of that, if you have partners that maybe you’re overpaying, um, I, again, I’ve been part of companies where we did renegotiations and they agreed you’re, you’re providing, you know, far more service and you’re being very gracious. And we came to terms where it was more equitable, like for a lot of companies that could be a tremendous amount of money.
Yeah, sharing your cha [00:34:00] more often than not. Startups are run by entrepreneurs, who’re type a personalities and we’re win, win, win, win, win. But the reality is, and we’re afraid to talk about our, our mistakes or our challenges, but the more that we share our challenges with our suppliers, the more they understand and they, they can actually come back and help us out with those challenges.
And, uh, but I always did like at.club, Michele, when you would negotiate a contract with someone, you get the deal and then you, after this contract side, you go back for even more, you know, a little bit extra placements, uh, for the domain on the search engine or whatever it is. You always seem to go back for more, even when you got the contract signed.
And I thought that was a neat technique as well. Yeah. And another, um, uh, tip I was thinking too is, uh, and I remember doing this early on in a previous, uh, startup I was involved with is, um, empower your employees and you can save money early on by empowering your employees. For [00:35:00] things that you might have otherwise hired someone.
And what I mean specifically, you know, if you’re selling a product or service, maybe you need content created, maybe you need photography done or videos done. You know, you may have an employee who’s in the accounting department, you know, not with that job description who happens to be an avid photographer on the side and happens to have all the equipment and have a passion photography.
And even though it’s not. Job description. You might be able to leverage their interest in their hobby. And instead of hiring a freelance photographer, leverage that employee and they know the company, they know your products, and they’re excited to show off their talents in that area. And we were able to successfully do that.
Um, when I worked at mixer, um, back in the days we had one employee, um, who was on the team, who was an amazing photographer and that was his hobby. It wasn’t his job description, but anytime we needed photography, everything from, you know, promotional, photography, social media stuff, even if we were at an event and we wanted photos taken, he always [00:36:00] raised his hand and was happy to let us, you know, let him use his own equipment.
So we didn’t have to rent equipment and take amazing photographs. And long story short, he eventually was able to, to move into. Full time and became a professional photographer, but we were able to tap in on his passion and his skills and save a lot of money and get some great stuff done at the same time.
So leverage your employees, not just for their jobs per se, but find out what their passions are and if they have other skills and interests, you can leverage them to the company’s benefit and save money. And what was the platform you used for the pod.com? Logo seemed very inexpensive process. It was fiber 99 designs.
Oh, 99 99 designs, right? Yeah. I, I think using a platform like 99 designs or fiber, I mean, you can sometimes have a project and you can get it done for surprisingly, you know, a low cost. And actually the quality is pretty good. I, we ran with the pot.com logo eventually, and it’s [00:37:00] the logo today. Uh, and I don’t think we paid more than a two, a few hundred dollars.
For the logo. So that’s an, that’s an idea to it. And we seem to have a lot of success with that. One other one I’ll throw out here. Uh, we have with paw is we, um, originally when we were, we had to spend a lot of money, we do spend a lot of money about 10 million a year on advertising through Google and Facebook and tick.
And you know, all these other companies, these social networks, and we really didn’t, weren’t paying attention to the payments that we were making on the credit card. And, you know, last year we actually did $250,000 in cash. Back on our credit card, you could get a 2%, we have the spark card, um, 2% spark card, uh, where 2% of anything we spend on that credit card comes back in cash.
Uh, and last year we saved about $250,000, which is [00:38:00] phenomenal in my opinion, like just. It’s almost like money coming out of nowhere. Like you just created this money. Um, before that we weren’t really tracking it. We were just using people’s personal cards or whatever it was. And we weren’t really that’s tax taxing the points.
You too. That’s tax free. Well, it’s gonna, no, that’s not. Cuz you’re gonna boost your profits. And when you boost your profits that that’s gonna pay tax on the profits. Yeah, we don’t live in Puerto Rico. If you do check no check with your accounting, you can move. If you get a personal spark card, you can receive the personal cash back tax free on your business expenses.
Well, that’s interesting. I’d I’d have to look at that one week. Maybe check the IRS code, maybe tos Tom’s here. You could share that one with us either way. It’s a great, it’s a great, it’s a great hack. It really is. It’s something that if you haven’t already done so on our other companies, I have another card.
I use the, my, my black card. Um, which is actually the gold one, which is 2% back. So that’s something you wouldn’t think about these little tweaks, these [00:39:00] little changes that we make in our startup can have huge impacts and cost savings. All right, Colin. Um, Mimi’s trying to keep count, but we’re gosh, we, we haven’t quite had 20, so I think let’s, let’s try to like hit that 27.
So I’m gonna throw one out here real quickly. I’m gonna say, um, don’t forget, you know, about your current customers. We all know it’s much more expensive to acquire a customer as opposed to working and developing a loyal customer. So really build out your customer’s, uh, loyalty programs to try to get more purchases is much more effective.
All right. I’m looking for someone else. I know we gotta come up. Come on, Gary. You got some other ideas of that head of yours. Yeah. And you know, I’m thinking, um, we did cover the BPO mindset, like this idea of business [00:40:00] process, outsourcing mindset. We talked about that right with the, uh, the Philippines. And we got Olivia here.
We were talking about you Olivia earlier, right? I dunno if you’re, I don’t know if you’re here, but Olivia, you might have an idea for us as well. We’re looking at ways startups can save money, a tip or a trick. If you’re in the audience it’s Friday afternoon, come on stage and have some fun with us. Hi. Um, I came here a little bit late, so I don’t know if you guys talked about this already, but, um, what I’ve learned is use what you have and make the most out of it.
Instead of looking for other resources, other people to just make the most of what you have right now. And you know what triggered another one. And I was thinking about this today. I was talking about at lunch was you walk around our office. We see, oh, we haven’t touched this little robot thingy jiggy over here in six months.
Oh, we haven’t touched this other little thing in six months. Oh, we haven’t, you know, walk around your [00:41:00] office, figure out what you’re not using or your home or whatever it is. And put it on eBay. Just let’s clear out the stuff. That’s the non-producing assets in our business. What can we sell off? You know, move, move off.
It might even be some, some, some IP that you might have that you could sell off. Who knows what? It could be some old inventory. I don’t know what it is, but we gotta get rid of that stuff and clean out the closet. Colin. I did a quick search and, um, according to a Forbes article, the IRS treats cash back as a rebate on spending and not taxable income.
So I don’t know if Tom can speak to that, but that may be a way that everybody can save money. I love that. That makes sense. like so obvious, right? That is that’s awesome. We don’t always do it. Thanks. Okay. But you have another tip, Gary, other than, other than, uh, playing a tax accountant, do you have another tip for us?
Oh, Jel. You got something for us? Jel. Uh, yeah. I mean this, [00:42:00] this one is probably, I don’t know if it, if it would apply to everyone, but, um, I know some people, um, maybe, maybe, maybe this is the wrong thing to say, but I’ll just say, um, some people get together by real estate and use that to fund their startups.
So if it’s something that. Um, a startup can come together to like a bunch of people that own different startups can come together, uh, have equity on a, on a, um, a, a cash flowing property. And, um, that could be a, a hack too. Well, one thing we did here in Fort Lauderdale, when we built the incubator, we went to the city and we pitched the idea to the city and they gave us $350,000.
So that just triggered what you just said there. Jackson triggered that memory. So why [00:43:00] not ask for money from your local government ask for help from your local government, uh, or even national? I mean, there could be programs nationally as well. So that’s an area I know, as a Canadian, we often would think about how do we actually get government funding.
That’s sort of one of the first questions, any startup, you know, asks. But when I moved to the us, that just that mentality is not. Um, when in fact there are a lot of government programs out there ready to help startups. So that’s the, that’s, that’s another one that I think, um, you can run with. Uh, here’s a here’s one more.
I came up with, um, accounting. So this is gonna irritate Tom, but, uh, but, uh, you can actually, um, set up the accounting with companies that have AI based accounting systems. Like Zue, Zue run by Lil Roberts. I know she’s been a speaker on this show. You can run your, your books for about $200 a month, and [00:44:00] now you gotta, you gotta watch it closely here.
We did hear about Tommy talked about, you know, we gotta spend the right time, do the right forecasting, et cetera, et cetera. Um, and I’m not suggesting that, you know, getting rid of your accountant, you know, who can help you save money in a lot of different ways makes sense. But in some startups. Uh, and we’ve used them for about two or three startups company called Zue.
They automated accounting and it’s $200 a month and they got IPA LUS in the background too, helping to make certain that, you know, all the entries are done correctly. And, uh, we were able to save with them. Uh that’s X, E and Zue is X E N D O O. And just for the record, I am an investor in that company too.
So I’ll disclose that I don’t wanna be promoting any companies here that, um, you know, obviously without disclosing anything. All right. We got, uh, a few more ideas. We got, I think I got like six or seven here. Michele. I think you guys got that one. I just, just [00:45:00] let it rip. Okay. And, and we’re gonna try make, I know I got, but I’m out.
I’m out. I don’t have everything left. I’m I’m just, that’s it showing me the money. I don’t that’s it. I’m. I met. I met, you gotta take over, so I’ll throw it out there. Like, you know, I know it was very popular and, you know, WeWorks and everything else in the startup culture to spend, you know, quite a lot of money on, you know, let’s just say designer drinks, Kambucha, you know, fountains, what, whatever, you know, like tons of treats and games, like is all that really necessary.
Okay. Now you’re, you’re, you’re gonna take away the wine. I don’t, we have free wine in our office, just, you know, we do, we really all. Alright, so $10 bottle, not the $20 bottle, you know, take away our wine. We have a Friday cocktail hour. If you’re in Fort Lauderdale, you should stop by. It’s like, you know, all the people here working in the startups and stuff, we gotta relax a little bit too.
You’re being too cheap, Michele. We don’t wanna lose our wine and our [00:46:00] kombucha. Well, alright, come, firstly, it’s, it’s cheaper to your point. to have a little happy hour in the office versus taking everybody out, right. Where prices are three X. So, you know, I’m kind of like jumping back to Tom and just be like, are, you know, are you actually looking at the expenses that you have because I guarantee you, you know, your personal life, as well as your startup, there’s always areas to optimize.
At least I’ve always found that.
Great. Um, Jeff, so I don’t, I, I apologize cause I took a call. So I’m someone already gave this idea. I apologize. But you know, I talked before about leveraging your employees, but also another way to save, especially early on is leveraging your customers. So if you already have product market fit and you have actual customers, um, you can leverage your customers.
To help you market your products at a [00:47:00] low cost, through a number of different ways. You can have a referral program where they get compensated for referring new customers. You can exchange products for service, and that’s something you can do by the way, not just with, um, customers, but, um, for other services.
So if there’s a service that you need, um, and you don’t want to pay cash for it, but you actually have a product that has value, you might be able to do barter and barter some of your products, which then you’re getting the retail value, but it’s only really costing you your cost of good. So you’re saving money that way.
So in other words, if, um, if you needed, uh, you know, the services of, of something and it was gonna cost $5,000, you might give them $5,000 worth of product, but you’re giving it to them at the. Retail price, but it doesn’t cost you that much. So you’re making the difference. So you’re basically getting their services at a significant discount, if that makes sense.
So you can leverage existing customers, you [00:48:00] can leverage barter, uh, as a way to reduce your, your cash outlays when you’re starting out. No, I like the barter idea that that’s, that’s a good one. That’s a, we used to do that in my first startup in the nineties. Going, going way back then. Um, yeah. Uh, we did talk about, um, applying for grants.
We’ve already talked about that sharing in office. We’ve talked about that. Um, I have an technology. There is a there. Yeah, I, I just try to one more technology. There are ways we can use technology to save money. You know, some ways like you’re right, Jeff, we have to wash those subscription plans, but technology is an enabler.
It’s something that can provide. Uh, better services and lower cost operating and, and not to be afraid of it, if we can find those technological, uh, apps or, um, you know, I’ll give you [00:49:00] an example of one that we use. We could put this in the blog is the, uh, the maintain X. So I have like a lot of companies and a lot of chaos, and it’s also organized very simply by using this app called maintain X and nothing falls through the cracks.
I can’t even imagine how it would operate without that. Um, but that’s one Olivia, you said you had something. Yes. Um, until you have the money to get all those softwares and those like that technology to help you maybe learn to do certain things yourself, like not to a point of burnout, but wear many hats in terms of learn new things and get some things figured out on your own, like use your, and model it to your team too.
Like if you. Instead of, um, I don’t know, paying for those, um, subscription plans for scheduling social media. Just learn it, learn how to do it yourself. And then once you get the money, you can subscribe and use those [00:50:00] tools. So example, awesome. You know, here’s a tip or trick that, uh, oh, sorry. Jel. Go ahead.
Oh, thank you. Thank you. Uh, I was gonna say that, that that’s awesome. Um, but however, sometimes it gets to the point where you don’t even have the time to do those things, even if you know how to do them, how do you tackle that?
Yeah. I, you know, I’ll just jump in here. It’s a balance, right? You gotta figure out like, you know, and that could be a point, like where are you better doing things manually versus automating. Like you can go overboard on oth either side of that equation and be inefficient. So, you know, just efficiency itself can be a cost saving, mess me, um, excuse me, method.
Yeah. And sorry, Michele. It also what we’ve done at startup club, um, we’ve created a [00:51:00] process, a manual process, and then we’ve looked for technology that can recreate that and automate it. So basically we test it and if it works, then we get the app or the software that actually can automate that process.
Yeah, that’s cool. Okay. I have another one. I got another one. Um, we, and I do this now. A lot of my companies I’ve been sucked into this as well. Zue is a company example of this is set up an advisory board. and I’ll tell you why an advisory board. We don’t wanna do a board of directors because the board of directors, um, comes with, uh, expensive, uh, insurance.
You’re, you know, pretty much, you’re not gonna get a real board of directors unless you ensure, um, unless you have the expensive insurance to go along with it. So if you can avoid a board of directors and actually set up a, an advisory board, not one, uh, you’re not spending all the extra money [00:52:00] associated with that insurance, but you’re also getting a lot of talent surrounding your startup for free.
And you’re also, um, surrounding your startup with, um, potentially some very good names in your industry to give you credibility. So if this is a way to actually grow your startup, but it’s also a neat way to save money. Cuz you’ve got resources. Now, people who are gonna make connections for you, they’re gonna help you make sales.
They’re gonna help. With strategy, you got all these resources and you’re getting them for free. And I don’t think, I don’t think, uh, you, they can go to the, uh, the governments, uh, like they did with Gary’s case and complain about the fact that they weren’t paid they’re they’re board advisors, and you can put them on your website.
Every startup should have an advisor. If they’re not bored, they’re bored. exactly. There you go. All right. So Mimi is telling me that we have now surpassed [00:53:00] 27. So I think this room has been, you know, we’re on the subject about saving money. This has been a good use of my time, and I appreciate everyone who’s given these cost saving tips and I’ve written down several.
I’m going to, you know, check out. But before we leave and do a quick round for anything, we left out. Please don’t forget. Um, we have a website that’s actually free, um, that has amazing resources, podcasts. Um, there’s blogs. You can join our email list to get, um, you know, event notifications when there’s cool things coming up.
Uh, you do that by going to, if you look above here above Colin’s head it’s www.startup.club. We’re here. We’re the serial entrepreneur club. We are here every Friday at 2:00 PM Eastern and our goal is to do anything and everything [00:54:00] to help entrepreneurs succeed. So Colin, before we leave, we have five minutes.
Maybe we could do a very fast run. Is there anything that we’ve left out? Well, we have, we have Carrie on stage here. I don’t know if she has something Carrie, to add to, uh, our list or she has an idea, a tip or trick or a hack. Um, that you’d like to share with us. Hello. Hello. Thank you for bringing me up.
And I’m so mad that I’ve missed this cuz I’m on central time. I had to, when I raised my hands, when you guys were talking about the board of advisors, I just wanna caution people that not all advisory board members will do it for in air quotes free. They may want a small and it is appropriate to give them a very small, small, small even cliff thing, depending on what their expertise is to give them cliff, cliff options or equity.
So just a and really again, especially when you’re looking for, [00:55:00] um, intros and all that. And the other thing is every time I hear the word board directors, I wanna tell new entrepreneurs. Be careful with the board of directors, even when you’re able to afford the insurance. And even when you’re a corporation, the people that you put on it are, are on it because that very same board can remove you from your company, uh, whether you’re ready or not.
So just wanted to add that. And the last thing I’ll say is, although I heard you guys just start talking about it, one of our very, very smart investors told us early on, if you wanna waste a lot of money, go and put a lot of money into beautiful offices and expensive drinks and all of that. And over employee, because startups seem to think that if the more employees you have, the better of a startup, you are, or more confirmation that you’re doing your thing.
And I will tell you mixed roses has done its thing with six employees. And two of them are the founder. So just wanted to [00:56:00] add that to this awesome conversation. Yeah. And the, uh, you know, there’s so much, I wanna add to this, uh, one, where were you when I was 28 years old and I almost lost control of, uh, the board and almost got fired and it was a publicly traded company.
Uh, the fact is, uh, you’re right. We gotta be very careful about, um, the board at that level. It’s a different game. There’s a lot of politics involved. And, uh, what I do with my board, uh, advisory boards is I generally give ’em a quarter point of the company in options, not in stock, in options, so that if the company hits a value of, let’s say 10 million, they’re gonna now reap the benefits I want.
You know, obviously I think it’s important with every, you know, key employee to make certain they get some upside, especially if they’re sacrificing from a financial perspective and, uh, you know, that’s great. We, we love that suggestions, those suggestions and your idea about not overstaffing this idea you gotta, you know, you know, I call it the Silicon valley disease.
You know, these companies I work with, um, I’m working with one right [00:57:00] now. It’s a sad. They raised over 60 million hired tons of people. And the entrepreneur worked for 14 years. And the chances of that entrepreneur getting 1 cent from this company is almost zero. And in fact, when they, uh, do ultimately sell or, or exit, um, all of that money will be paid to the venture capitalists who came in.
So you talked about overstaffing, I think, uh, over financing is also not necessarily the smartest move and financing, the right type of financing for your startup, which I think we’ve done a show once on as well, but we should really repeat that show, but the right financing for your startup, that’s absolutely critical and key.
You’d want to minimize dilution and minimize interest. And those are the things we want to think about when we raise money. Carrie, that was a nice way to finish it. Uh, I know we’re out of [00:58:00] time right now. I just wanna say next week. So we’ve been doing a few of these shows where we take a particular industry.
We did it with tokenizing real estate. It’s one of the prior episodes. And, and by the way, that is taking off, I just met another gentleman in my cohort, um, that I was teaching. He actually was doing tokenizing real estate as well. Uh, we did one on Airbnbs last week. If you’re thinking about Airbnbs, that’s a great show.
We had some real experts on there on some tips and tricks. Next week we have two real estate investors. One of them is a big, uh, uh, personality here on clubhouse. He’s got about 600 homes Japi and the other is, um, a gentleman I’ve known personal friend of mine. He’s got about 1200 homes in the Fort Lauderdale area.
And, uh, he came here as an immigrant Aless immigrant and was able to, to build up that portfolio. So we’re talking about real estate next week and real estate [00:59:00] investing, which happens to be the number one way. People generate wealth in America or in any country in the world. So we think it’s an important topic to have its own show.
All right. Thank you very much, everyone. Especially those on stage. Carrie, wait, don’t leave Carrie. I wanna make sure I’m following you. That was such good advice. We really love it. When we have people like yourself or Drexel, um, coming back on stage for these shows and really contributing. It’s all about the community.
And today you, you proved it once again. Thank you all. And we shall see you next week. Thank you so much.