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April is Financial Literacy Month and for the small business owner, that is an especially important topic because, frankly, many entrepreneurs are not especially financially literate. Why is that? Generally, the skills and personality traits that enable someone to start a business are not necessarily the same ones that foster money smarts.


Entrepreneurs are many things – creative, hard-working, enthusiastic, driven, etc. Those are all things that really help in starting a business. But you will notice I didn’t say, “financially literate.” Being good with money is not the same as wanting to create something from scratch. 97369893_s.jpg


But if you want your business to succeed long-term, then you must learn how to be good with the money stuff, too. For example, one of the keys to being financially literate in your business is understanding how to keep your overhead low.


When I was the unhappiest lawyer in town working incredibly long hours for demanding partners, I began to plot my escape. In off hours (what few there were) I would meet with attorneys I knew who had successfully broken away from the corporate firm life and started their own practice. I wanted to know two things:

      • How did they do it?
      • How did they stay in business?


While I heard all sorts of stories and learned many lessons that served me well, the most consistent piece of advice I received was a bit of financial literacy:

“Keep your overhead low.”


Clients and customers come and go. Business goes up and business goes down. The economy booms and busts. These successful lawyers told me that the best hedge against this inevitable business cycle is low overhead.


Here’s how to keep your overhead low:


Cut down on rent. There are many ways to do this:


      • Negotiate (or renegotiate) with your landlord: Reliable commercial tenants are hard to find. That puts you in the driver’s seat. You have leverage. Use it to get your rent lowered.
      • Find new digs: If your present landlord won’t cut a new deal with you, you can rest assured that there are plenty of other landlords who want your business. They will.
      • Go the WeWork route: If you don’t need a full-time office, another great option and easy way to cut your overhead is to consider a collaborative workspace like WeWork. As you may know, these are fully functional and furnished spaces you can rent by the hour, day, week or month, as needed. By not paying for space you don’t use, you save money.
      • Sublease: If you have an office that is not 100% full, or if you have certain hours or days when you have space not being used, consider subleasing that space to help reduce your overhead.
      • Go virtual: I know a guy who recently closed his office altogether. No, he didn’t go out of business, he just sent everyone home to work. They still meet in person once a month, but otherwise they work virtually. And he’s saving about $2,500 a month in rent.


Talk to your vendors: Just as I am suggesting that your landlord might be more willing than you think to  keep you, so too might your vendors. A paying client is a valuable commodity. See if you can get better terms or prices. And again, if they won’t cut a deal, there are plenty of folks out there who want your business.


Cut your marketing budget: There are many ways to market your business today that cost next to nothing. Check some out, adopt a few, and in the process, lower your marketing costs:


      • E-newsletter advertising can be very effective and affordable, too


Buy used: Refurbished computers and used office furniture can be found for a song and often in very good condition. Craigslist is a great resource in that department


Want more information to help you be financially literate?  Check out our Managing Your Finances section, Cash Flow Management Resource Center and the Small Business resources on


Related: Managing Your Finances

Related: Cash Flow Management

Related: Have a question about business financing?


About Steve StraussSteve Strauss Headshot New.png

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business SuccessSteven D. Strauss.


Web: or Twitter: @SteveStrauss

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Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.


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