If you work from home, then your overhead costs are already pretty low. With a home office you save on transportation, rent, and utilities, but when times are tough you may need to look for more creative ways to save. The trick is to cut costs without cutting corners.
Cost Saving Tip: Going paperless is more than a fad, it’s good business sense.
In the end, you do have to spend money to make money, but when you’re a solopreneur, every penny counts. The more cash you can save by eliminating or reducing unnecessary expenses—advertising, office space, equipment, and supplies—the better your chances of surviving any economic storm.
Accounting: Save by Spending?
You wouldn’t operate on a patient without an X-ray, right? Well, before you start to trim your budgetary fat, make sure you have a clear picture of your finances. If you’re handy with spreadsheets, then you can build a budget and keep track of your spending for free with Google Docs. If you want something a bit more professional, small business accounting software, such as QuickBooks, is affordable and relatively simple to use.
If you feel overwhelmed by all the numbers, then consider hiring a tax professional. I know what you’re thinking: Why would I pay an accountant? Aren’t I trying to save money? But splurging on a CPA can save you money in the long run. Even the lowliest tax hack at H&R Block is sure to find a few deductions you’ve overlooked.
And beyond your refund, tax professionals generally accept responsibility for any penalties or interest that results from filing errors or omissions. Anyone who’s ever faced an audit can assure you: it is well worth it. Yes, you can save a couple bucks by filing yourself, put it’s hard to put a price on piece of mind.
Go Green During Self-Employment
Going paperless is more than a fad, it’s good business sense. Cut down on costs, eliminate clutter, and take advantage of an opportunity to promote your business’s commitment to the environment.
The first and most important step is buying an external hard drive. This is essential: until you’ve backed up every file, stay away from the shredder. Next, get rid of those messy and expensive ink cartridges. Sell your printer and your fax machine on Craigslist, use the money to invest in a high quality scanner.
If you are paying contractors or billing clients through the post, then consider switching over to e-billing.
Freelancers, Pay Less for Health Care
If you’re paying out of pocket for health insurance, then make sure you are getting your money’s worth. In my home state of Oregon, the Freelancers Union now offers nonprofit cooperative insurance plans for the self-employed. If you would prefer to buy health insurance directly from a provider, then take the time to shop around and compare quotes online.
Health insurance is a luxury… until you get sick. For the uninsured, proper care is often prohibitively expensive, and a few months of treatment can easily bankrupt a business and send a solopreneur deep into debt. In the end, healthcare is an investment in your financial health as well as your physical well-being.
Have you found a great secret that you’d like to share with other self-employed people? Help your fellow freelancer learn to save money without sacrificing quality, and leave a comment below.