Small Business Budget: Trim Your Software Overhead!

Small Business Budget

To keep your small business budget light and clutter-free, minimize your software overhead!

Auditing Your Small Business Budget

The boom of subscription-based Software as a Service (SaaS) in recent years has opened up countless affordable services for efficient small business operations, but once your collection of services grows, the monthly total can add up to a big chunk of cash.

A regular audit of your services, like we do quarterly at EPW Small Business Law, likely will reveal some clutter in the form of small (or not so small) monthly payments that add up over time.

Every type of business is subject to “budget creep.” Click To Tweet

Let’s Talk About Overhead. (Yep, online businesses have overhead too!)

While owning and operating an online business vs. a brick-and-mortar store usually means drastically reduced overhead expenses, online businesses still have overhead.

Overhead includes all non-labor expenses required to operate your business, e.g., administrative costs and marketing costs.

A SaaS overhead audit may be revealing for virtual businesses that don’t have the big, obvious costs like rent but are overspending in other ways.

Categories of Services in a Small Business Budget

Small businesses use a spectrum of software services.

At EPW, we have 5 major categories, each with approximately 6 services. Here is the major category breakdown, along with some examples of our favorite services that survived our budget trimming:

Have a Non-Essential Service? Let it Go Like that Dress You Never Wear!

Reviewing services is similar to cleaning a closet; there is always that shirt you are used to having around, but really there is no good reason to hold on to it.

Or maybe there is a dress that was a good investment at first, but it has since lost its luster.

For EPW, an example is our switch from Rackspace web hosting ($150/month) to WP Engine ($29/month).

We used Rackspace for many years because of its historical reliability, great customer service, and capacity to scale to infinity. Also, there was a time when pricey managed servers were the only other option, so when cloud hosting came along at $150/month, it seemed like a bargain.

After a surprisingly negative experience with Rackspace, when we had some major downtime and unsatisfactory customer service, our decision to switch and save became straightforward. And WP Engine has been great for us!

Three Steps to Trimming Your Small Business Budget

Simple steps to keeping your overhead lean:

  1. Make a list to track all your services. We have an ongoing Airtable with services organized by category and monthly cost for easy totaling.
  2. Identify any services that can be eliminated altogether. The services may have been useful at one point, but your business has evolved, so maybe it is time to let them go.
  3. Shop around for a better deal on indispensable services. You may find equivalent or better quality service for a better price. Or, sometimes it makes sense to go up a bit in price for a better service and make cuts elsewhere. 

The $1,000-a-Month Gauge, or a Number that Makes Sense for You

Is your monthly overhead under (or well under) a grand-a-month? Good!

Here’s a sample software cost rundown from entrepreneur and small business expert, Chris Ronzio that came in at $923.90-a-month when he wrote the post in 2016— What I Spend on Being Efficient.

Maybe your gauge is more like $500 or $1,500 or another number that makes sense for your business.

The range for different businesses varies dramatically, and the process of trimming the overhead depends on what is essential vs. what is dispensable for your specific situation.

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What does your overhead look like? Talk to us on Twitter or Facebook about your budget challenges or about services you cannot live without!

Need to work on some legal aspects of your business as well? Try an EPW Quick Call!

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