The greatest financial habit you can have in business is cutting costs.
Many freelancers would rather do anything than work for someone else. They love to call the shots, determine their rates and work the hours they choose. They have love the freedom: time freedom, spiritual freedom, financial freedom . . .
Wait, that’s not right.
The notion that being your own boss gives you financial freedom is one of the prospects that attract a lot of people into freelancing. However, the sense of freedom you get as a freelancer can actually obstruct you on your journey to financial independence.
One great way to avoid this and ensure you not only make, but also keep more money as a freelancer, is to always find ways to save money on almost everything that concerns your business. In fact, as a freelancer, you should develop these cost-cutting habits.
As a freelancer, you’re your own accounting department, and your job in this capacity is to track your finances and eradicate waste to the barest minimum. This involves, among others, tracking your business income and expenses.
This offers you a lot of advantages, starting from having several tax write-offs (that new iPad is a business expense, duh!), to being able to identify areas you’re simply wasting money on your business (premium memberships you can survive without).
Using cloud-based software
There are times you can’t do your work efficiently without the help of software. You should, however, always think “free” or “low-cost” when it comes to using software. With a myriad of cloud-based or open-source software options out there, you can get your emailing, calendaring, project management, team collaboration, content creation and management, accounting, customer relationship management (CRM) and more done for free.
Apps like Evernote, DropBox, WordPress, Google Apps are free examples — at least free until when you need more features.
Buying in bulk
Several things you need for your business will come cheaper if you buy them in bulk. Instead of buying your stationery when you need it, for example, you can order a whole year’s worth of supply to cut costs. You can do the same on bills for useful things like telephone, software, memberships.
Sounds counterintuitive? Look at it from a better perspective. When you need more hands in your freelance business, outsourcing tasks instead of hiring employees significantly reduces your overhead costs. Plus, outsourcing helps you free up time you can otherwise use on delivering more value to more clients.
Saving on utility expenses
While utilities are a necessity, if you’re prudent enough you’d see opportunity to shave off some money here and there. Reducing your consumption is the key.
Energy is a great area to cut costs. Avoid waste of power by switching off appliances when not in use. Also, switch to energy-efficient appliances (e.g., energy-saving bulbs) when replacing old ones.
And what about your insurance plans. Do you need them? Can you get cheaper plans that suit your needs better? Are you spending more than necessary on your phone bill? Can some of your calls be made via Voice over Internet Protocol (VoIP) like Skype?
Paying your debt
If you eventually develop just one of the habits in this article, let it be this one. Always try to pay off debt as fast as you can, especially credit card debts. Otherwise, compound interests and other piling charges will eat deep into your profits.
The faster you pay off your business-related credit card debts, the more money you have at the end of the day for savings and major expenses.
This could be the best cost-cutting habit you can develop as a freelancer — in fact, as any business owner