By James Adams
One of the true challenges of becoming a freelance fill-in-the-blank is that you are now responsible for covering the costs of everything required to do your work. No more company anything – unless it’s your company paying for it! This reality makes saving on costs essential to getting started, surviving and ultimately thriving.
Here are 8 ways freelancers can reduce their expenses:
1. Put your business on a strict budget: The goal here is to reduce expenses the old-fashioned way by simply spending less. You won’t have to find ways to make it up in profits or tax breaks if it doesn’t leave your pocket in the first place. A bare bones budget that still allows you to have the essentials for success begins by understanding what those “musts” are. Think through your real needs and budget to make sure you have them. A trackable budget will prove an asset over and over again.
2. Telecommute: The cost advantages to working from home are enormous. You’ll spend less on vehicle expenses, wardrobe, fast food, office rent, parking fees and a host of other costs. The advantages to your family life that many experience in telecommuting and the opportunity to be environmentally green in your business practices are important bonuses to consider as well.
3. Travel less: When you do go out, bundle your stops to get as much as possible done in one trip. If you aren’t picking up groceries or packages consider using alternate transportation such as a bicycle, scooter, or your own two feet. Living in town will help where it is possible and affordable.
4. Share office space: When you need a professional atmosphere to meet with clients on occasion why not join with 3-4 others and rent one office, one phone, and one receptionist if you must have one. Allot the hours of use evenly and keep an online schedule book for all to access. It will take a few weeks to work out the details and learn to avoid scheduling conflicts but this money saver for freelancers is a growing trend that makes plenty of sense.
5. Choose open source software whenever possible: Since proprietary software can be pricey, look for ways avoid purchasing it by tapping into the growing stream of open source options that now cover most applications you’ve been paying for. Many users of open source software find it better overall than the paid software it replaces. You may have to try several open source options to find one you prefer. In doing this you can save your budget for those programs that cannot be duplicated with open source software.
6. Reduce your use of paper: Here’s another green tip that will save you money on paper and the expensive ink and toner cartridges they consume. Some of your clients will be happy to receive materials electronically instead of on paper and every correspondence or document sent via email/attachment will cut down on costs for you. If you continue to print, do your research to find a printer that is not a toner hog. Read reviews to find the most efficient users of black, magenta and the rest.
7. Keep receipts and records of every possible work-related deduction: You’ll be amazed at just what you can write off. Start by accessing a reliable list of these either online or from your accountant or tax preparer. Don’t overuse the items or categories on the list. For example, spending money on unnecessary business travel is still a bad financial decision since the deduction will cover a small fraction of the expense.
8. Purchase used items when possible: Refurbished business machines are cost effective ways for freelancers to reduce expenses. Second-hand furniture and office accessories can be had for a fraction of the cost of new. You may even be able to put together all or parts of your wardrobe through second-hand shops and look better for less in the process. If you must buy new clothes, shop the clearance racks for incredible bargains on items that are still in fashion.
Keep in mind that every pound or penny you save is an investment in the success of your company. If you learn to budget and strictly avoid wasteful spending you’ll soon have extra cash to put into your efforts that will generate growth, profitability and all the advantages they bring with them.