Save Like a Twentysomething Entrepreneur

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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If you’re searching for ideas about how to cut costs so you can weather the uncertain economy, maybe it’s time to look to young entrepreneurs. Those who have started their businesses in the downturn are experts at running a lean operation. They never had a chance to get addicted to the perks and inefficiencies of the boom years that can become unduly costly when times get tough.

Take Willie Morris, an owner of The Pancake Movement, a Ft. Lauderdale-based digital consulting and design firm that launched in January and recently teamed up with Kitche Branding, another local firm, on a project for RIM. Morris, 27, incorporates strategies that would work at many businesses or could easily be adapted.

Rely on Flexible Teams

Morris and his business partner, Andy Vitale, learned early not to lock themselves into the high overhead that comes with a large crew of permanent employees. Morris says it generally makes more sense for them to hire freelancers with the precise skills they need to execute their current projects, “instead of having huge overhead on payroll and being forced to only find projects that cater to the skill sets of full-time employees.” Currently, the duo relies on a core group of 10-12 people.

How do they make sure talent is available when they need it? “I made it a point to cultivate our network and find people we could trust,” says Morris, who met many of his freelancers by becoming active in local events in the tech community.

Dive into the Weeds

The conventional wisdom is that entrepreneurs should stay focused on the big picture of running a business and delegate day-to-day projects to others. Morris, a self-taught techie, and Vitale are willing to break that rule sometimes. Recently, for instance, they handled a simple website launch themselves, instead of bringing in contractors to help. Not only does it help them to keep outsourcing costs down, but it also gives them valuable perspective on operations. “You lose sight of the production side until you start doing it yourself,” Morris says.

Share your office space

Through the site Loosecubes, The Pancake Movement rents out one or two unused desks in its offices by the day. Loosecubes offers the space to mobile types like freelancers and traveling business people who need a very short term place to work. “If you don’t mind sharing your desks with people, it’s a great way to bring in money, as well as utilizing space,” says Morris. Side benefit: By welcoming others to their office, they’ve met talent they have tapped later for projects. The system has worked so well for The Pancake Movement that the company is planning a move to new office, where they plan to lease out desk space by the month.

Replace your Land Line

In what might seem like a radical step to those who have spent decades working in offices with traditional phone systems, The Pancake Movement uses the free service Google Voice instead. Calls that come into the office number—the one The Pancake Movement has gotten from Google Voice, that is—ring on staffers’ cell phones. “We have cell phones, anyway,” says Morris. Because the service notifies them that a Google Voice call is coming in, they can distinguish between business and personal calls before answering. And fortunately, they have unlimited calling plans.

Milk Google Apps

The company has used one free service to send and receive mail from its own custom email domain, instead of paying for a custom email address.

Keep Your Files in Dropbox

Morris and his team minimize data storage costs by keeping their files in the folders available from this cloud-based service. It’s available for free in a basic form or in professional versions for $9.99 a month or $19.99 a month, depending on storage needs. Worried about accidentally losing documents? One of Morris’s favorite features allows you to “undelete” a deleted file for up to 30 days.

Go Paperless

The Pancake Movement doesn’t have a printer. Morris’s team asks clients to sign and return contracts in pdf documents and scans the occasional paper document that arrives. Was it hard to break the paper habit? Apparently not. “I don’t even think about it anymore,” says Morris.