I have a friend who, when she had her first child, didn’t give him anything sweet until he was three. At three years old he had his first cookie and only because a little old lady gave it to him without his mom knowing. This child is now seven, and guess what? He doesn’t like sweet, sugary foods. Maybe he was predestined to be a salty snacker, or maybe there is really something to this.

This child was operating in a mode his mother called “ignorance is bliss.” He didn’t know how much a big, soft, chewy, chocolate chunk cookie would change his life because he was never really exposed to it. So guess what? He never missed it.

The same concept can be applied when you start your own business. If you start lean, you will most likely stay lean, which will translate to your wallet getting fatter.

If you can start off your small business as a lean startup, I’m convinced you will be able to ride the waves of the ups and downs of cash flow, client loads, and economic downturns. The first fifteen years of my adult working career was spent managing restaurants. If there is one industry that has always operated lean, it is this one. I was the manager that wrote up employees for not scraping the avocado to its entirety from the peel. And never scheduled an out time for employees’ shifts because as soon as the rush was over, I was shrinking my labor by the minute. The profit margins are so narrow in this industry that your mindset is constantly focused on “How can I save money? Where can I reduce cost? How are we being efficient at this moment?” while still maintaining good customer service. When I left the industry, I was shocked to learn corporate America had no concept of this. I just assumed all businesses ran this way. Today more than ever it is easy to run a lean business without the looking lean.

Here are some tips for getting you started lean and staying lean:

  1. Building/Office Space: Overhead is always going to be high on the list of major expenses for any business. This one definitely depends on the type of business you are, service based or product based. Office space may be an absolute necessity for meeting with clients, but maybe it isn’t. Before signing a lease, think about this and consider some other options, such as: (1) Is it possible to run a virtual business from anywhere? (2) Could I share an office with another complementary? (3) Have I considered a co-op or coworking space set up? These places are popping up everywhere, and they are not just for tech startups with bright orange furniture and turquoise colored walls. There are many modern, executive-looking spaces like this available. You can rent a small office within the space or have a basic plan with a desk and rent a private conference room when needed. There are a lot of pricing plans and options available depending on the city you work in.
  1. Employees: Employees are costly and rack up the expenses quick. With all the options of bots, phone answering services, virtual assistants, freelancers, and more, there are plenty of options to outsource help that you need. This is when you ask yourself, what do I really need help with? With the next questions being, how much help do I really need? These questions will help you to determine what you are looking for and what your options are. Maybe you just need a freelancer to help but not full time and not even consistently part-time, you just need someone part-time for the next six to eight months. There are many labor options out there and even websites to help you find the right fit for what you need. Consider what your true needs are before hiring someone.
  1. Technology and Software: As I said, we live in an amazing time of technology, and it is only getting better. With that said, the options are dizzying. I like to go by one rule: You are buying the software, don’t let the software buy you. Demos, sales pitches, and bells and whistles are easy traps to fall into and can create a need we never thought we had. Again, go back to what you really need and determine the features and functions you won’t bend on. Stick to that list before you see a demo. I’ve been through many demos and sales pitches, and yes, the software they were trying to sell me was amazing, and yes, it integrated with a lot of other things I used, but if it didn’t have a particular feature that saved me hours of time, I didn’t care that it integrated with another software I used and that integration only saved me five to ten minutes a day. I wanted the biggest bang for my buck, meaning, where will this product save me the most time and will it be accurate?

Also, don’t fall victim to technology overload. If you are using a different app for all your different tasks, you may think you are being efficient but the reality is, you are most likely being inefficient. If it truly saves you time then use it, but if you are spending more time getting it to sync, upload, and download information than the actual time you spend in it, then don’t bother. Stick with a few apps that give you the most savings of time and the least amount of frustration. Also, give it a month to determine that. Using a new app or method of doing a task is essentially changing your habit of completing something. Make sure you give yourself a reasonable time to decide if that product is worth keeping.

  1. Expenses: Before you even begin going out on your own, have a come to Jesus meeting with yourself and ask: Am I good with managing money? Do I spend money on frivolous things that I don’t really need? If you do, and managing money is not your strong suit, that is OK. If you can acknowledge this, you are far better off than many solo attorneys, small business owners, and the general public. Why is this important? Most people carry their personal-money habits right into their business-money habits. Your business is giving you a paycheck, and if you are not managing the money for your business well, this could be detrimental not just to your business but to your personal income.

You can still manage your business expenses well even if your personal expenses are not as stellar, but it requires a mind shift. The easiest way to do this is to continually ask yourself:

Do I really need this? If the answers is yes, I like to then go through the four whys:

  • Why do you need it?
  • Why is it going to be beneficial for your firm?
  • Why is it going to make you or your firm better off in the next six to twelve months?
  • Why is that benefit important?

Keep asking why until you get to the bottom of the reason. This can be for any expense. Laptops, software subscriptions, employees, marketing, overhead, etc. If it is a legitimate reason, then make that purchase. If it is not, then hold off.

If you are well into your business, I suggest combing through all your expenses each month for at least six months. I bet you will find a subscription lurking in there somewhere that you don’t use, a service that you are still paying for that your firm has not used in three months, or, my favorite, an erroneous charge on your business credit card. Take a deep dive into your expenses and see where you can trim some fat. Almost every business can find expenses that are not absolutely necessary or that you know you are overpaying for but just haven’t yet made the switch to something more affordable and efficient.

  1. Branding and Marketing: I love a good logo and website! But not one that costs $8,000+. Don’t fall into the trap of needing a perfect logo and website. You are not selling products or even an image, you are selling yourself and the services you provide. A nice readable font of your firm’s name and website that looks like it belongs in the 2014–2018 date range will work fine. Please, for those of you who have sites that look like they are from the AOL/’99 era with the left-sided menu and the pupil-sized round bullets (dots? buttons?), for the love of anything slightly modern in this world, please spend some money and change it! Seriously, potential clients will judge you on that. An outdated website screams “out of touch” to your potential clients or customers. You can get a good site designed for about $2,500-$3,000 or if you have some time a simple templated landing page on Squarespace can get you started and then spend money on a site.

Marketing is always a tough one because the expenses can be high and the returns can be low. It is also one of those semi-intangible services that are supposed to bring tangible results (money). It’s a long game that sometimes the ROI (return on investment) can take months to reveal. Or, with the right social media, target market, and messaging, it can be the opposite, giving you a great bang for your buck. You will have hits and misses. Some questions to continually ask yourself are: What is my expected ROI? (return on investment) Do I own my content or do the agencies doing it for me own it? Are my new clients my target market? If not, why? Continue to evaluate your ROI, and if it is not where you would like it to be, then consider other options.

Conclusion:

Be thoughtful in your business expenses. Really evaluate your true needs and avoid any knee-jerk or impulse products or services that come across your desk. Continually evaluate expenses and the necessity of each of them. Are they increasing revenue, are they allowing you to be more efficient? Ultimately, are they saving you time and money?