29 Ways to Save on Home-Office Expenses

If you're thinking about starting a home-based business, oralready run a business out of your home, you know that office expenses-- furniture, equipment and supplies -- can eat up a lot of cash. GaryForeman, founder, editor and publisher of The DollarStretcher, and Shel Horowitz,owner of and author of Grassroots Marketing: Getting Noticed in a NoisyWorld (Chelsea Green Publishing, 2000), offer tips on how to make themost of your budget.

"Cash flow kills more businesses than lack of profitability,"says Foreman. Saving money is as critical as your marketing plan andyour product pricing. It's an essential part of your business.

• Tip No. 1: Don't spend money on appearances. "If it's a home business, you're not likely to have people come into your office," says Foreman. "But even if you have a small business with visitors, people will recognize that you're wise to not spend money foolishly."
• Tip No. 2: "New ventures ought not to spend lavishly on furniture," says Horowitz. "Get by with the bare necessities. You need a desk and a place to put your computer."
• Tip No. 3: That said, "Don't stint on the chair," says Horowitz. "You'll spend more on a chiropractor than you would have on a decent chair." Moreover, you don't need to pay $500 for a good chair. Good quality desk chairs can cost less than $100.
• Tip No. 4: Shop around. "Some business owners make a checklist of the things they need, then go to the office supply store and fill the order like it was a grocery list," says Foreman. That's not the best way to get the most for your money.
• Tip No. 5: Think about whether you need to own the equipment. "Can you share or rent it when needed?" Horowitz says. He creates mini-co-ops with others, and the group shares use of the equipment.
• Tip No. 6: Be creative. "You can find resources without spending a lot of cash," says Foreman. Use items already on hand to serve your needs. A coffee mug can double as pencil holder.
• Tip No. 7: Put the word out. "Someone may be getting rid of a piece of equipment," says Foreman. If people know what you're looking for, they can direct you to low-cost (even free) resources.
• Tip No. 8: Be patient. "You may not need a fax machine right away," says Foreman. "You can wait until you find one at the right price."
• Tip No. 9: Get value for your money. You can buy cheap file cabinets from a mass-market discounter, but they won't last very long. "We bought a four-drawer file cabinet for about $200, 10 years ago, from Quill; a quality office discounter. It's in new condition," he says. "We bought a good quality lateral file at a tag sale for $5 or $10. But the cheap plastic ones we have are wearing out and need to be replaced."
• Tip No. 10: Everything is subject to negotiation. "I don't just ask for a lower price," says Horowitz. "I ask them what else they can do to sweeten the deal. They can add something that has high perceived value but doesn't cost them much. For example, when I bought a computer, they threw in the modem and printer. They could offer free delivery."
• Tip No. 11: You need to talk to a real person to negotiate, says Horowitz. Ordering online doesn't allow you room to negotiate.
• Tip No. 12: Bring someone else's price to a retailer that you want to patronize. "Ask if they can offer you the same deal," says Horowitz.
• Tip No. 13: Check going-out-of-business sales. They'll often have equipment and furniture that you can use in your home office. "When I was a purchasing manager, we once had 75 desks we were trying to get rid of. We sold them for a few dollars each," says Foreman.

• Tip No. 14: Stock up at back-to-school time. "You'll never find consumables cheaper," says Foreman.

• Tip No. 15: "Don't think of it as buying stuff, but rather as accomplishing a task," says Horowitz. For example, he needed to connect two computers to the Internet. Instead of buying two Internet connections, he purchased one Internet connection and used a router to connect the two computers.

• Tip No. 16: Bundle services and buy packages when you can. Horowitz has a $55 monthly phone plan that allows unlimited outbound calling anywhere in the United States or Canada, and includes voice mail and other perks. This is cheaper than even a low-cost long distance plan that requires him to pay by the minute.

• Tip No. 17: Ask yourself, "Would I spend this money on a personal item?" Foreman says, "Business money doesn't feel as real as personal money. You need to use the same set of standards when spending business money as you do when spending your personal money."

• Tip No. 18: Questions to ask yourself before buying, according to Horowitz:

  • Is this the best use of my money?
  • How often am I going to use it?
  • Is buying this the best way to meet my needs?
  • Are there other people I can share the purchase with?
  • Does the product/brand have a good reputation?
  • Is it well-made?

• Tip No. 19: When comparing two sale items, look at the original list prices of your choices, says Horowitz. "If something was more expensive originally and on clearance that would be a better deal than a lower priced product that was lower priced to begin with. The quality of the object with the higher original list price will often be superior."

• Tip No. 20: Use your home phone instead of a business phone if you can, suggests Foreman. This is much less expensive than getting a business line.

• Tip No. 21: Know when to buy a product vs. a service (i.e., an answering machine vs. voice-mail service.) The product may have a higher one-time cost but be less expensive in the long run. However, the service may actually offer more value than the product. Horowitz suggests that when it's something that will soon need to be upgraded or will become obsolete, it makes sense to pay for a service or to lease the item. When it is something relatively stable, it's usually wise to buy the one-time product.

• Tip No. 22: Don't forget all the costs of owning when comparing prices. A more expensive printer may use less expensive ink cartridges. Horowitz kept the costs in mind when he chose Internet fax service over a fax machine. "I've never been sorry. There's no cost of purchase, no inconvenience of the machine, no junk faxes, no monthly phone-line fee."

• Tip No. 23: Don't overestimate the difficulty of planning and budgeting for your home office expenses. "You don't have to have an MBA to understand it," Foreman says. "We can all get this business concept."

• Tip No. 24: Make compromises. Horowitz used to buy 100-percent recycled paper but lost his supplier. Now the cheapest he can find costs $75 per carton, while nonrecycled paper can be found for $25. So he settled on a 30-percent recycled brand that is less expensive than the 100-percent recycled but more expensive than nonrecycled.

• Tip No. 25: Sometimes paying more makes sense, says Horowitz. "I've never been sorry I went from $20 a month for dial-up Internet service to $50 a month for broadband because it saves me 15 to 20 hours of time each month." But while he could save $30 a month on his phone bill by using Voice Over Internet Protocol, or VOIP, he's not yet convinced the quality is good enough for his needs.

• Tip No. 26: Go online. Craigslist.com, freecycle.org and other Web sites allow local people to place free ads giving away things they no longer need, says Foreman.

• Tip No. 27: Buy only what is strictly necessary. "I got the desk I'm sitting at today free," says Foreman. "My wife worked for an accounting business and they were going to throw it away. I'm still sitting at it 10 years later. I could afford to replace it but don't need to."

• Tip No. 28: Purchase equipment used. "You can buy a 1- to 3-year-old computer used. That should be as much computing power as most people need, and you'll save a lot of money," says Horowitz.

• Tip No. 29: Order what you need when you need it, recommends Horowitz. "Don't keep enormous amounts of inventory. It takes up space and becomes obsolete. You could use that space and money elsewhere." He tells the story of buying resume paper for the resume business he used to have: "I stocked up because the style was being discontinued. But then I stopped doing resumes for people. Now I have a lifetime supply of the stuff."

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