To run a profitable freelance business, getting the money side of things right from the get-go is essential – especially if you are just starting out as a freelancer and not used to managing personal and business finances.
It may be tempting to splash out on vanity purchases such as an all-singing, all-dancing website, but until you get established and have a healthy cash flow, here are 5 ways to cut costs and save money as a freelancer.
Reduce unnecessary outgoings
Before launching your freelance career, try to reduce or eradicate personal debt such as credit cards, loans and overdrafts.
You will not be able to rely on a monthly salary to pay for these outgoings as a freelancer, so it’s essential you know what your monthly outgoings are so you can plan to reduce or stop them. You should also consider canceling costly and non-essential subscriptions.
Likewise, it makes sense to save as much money as possible before you go freelance.
It could be that you work part-time for a while or launch a freelance career while still employed full-time. This is especially the case if you have a family or dependents that rely on your income.
The point is to have a buffer fund to rely on for the slow months or the dreaded freelance feast and famine cycle.
Use free online tools
Many Software as a Service (SaaS) tools have a free version you can use when running your freelance business.
Some online tools, such as Libre Office, are completely free, which you might want to consider (assuming it has all the features you need).
You can use the free version of Canva for graphic design for your social media marketing and the free version of Grammarly to proofread documents and check for errors.
Likewise, choose the free plan offered by email software providers to set up your email newsletter to inform potential clients of your latest news and offers. These are all powerful marketing tools that you can use for free.
Nowadays, you don’t have to pay for video editing or film-making either. You can simply make videos with your smartphone and post them on social media. While you might want to upgrade later, when you are on a budget, it makes sense to use the free tools at hand.
The same goes for invoicing.
Invoice Ninja is a leading free invoicing software for small business invoicing, online payments, tracking expenses and billable tasks. It also includes attractive, professional invoice template designs you can customize with your logo and brand colors.
Join free business groups
There are plenty of business groups online (for example, Facebook and LinkedIn) that you can join for advice about freelancing in general or your specific niche or skill, for example, copywriting.
You can ask questions in most of these groups and learn from other freelancers’ experiences. Learning from other people’s mistakes is a less costly way than making your own, especially when it comes to pricing your services, sending client proposals and dealing with late payers.
You can also learn a lot from other freelancer’s content and processes, so it can be a good idea to sign up for their email newsletters, especially if they specialize in helping freelancers get clients.
It’s also a great way to network with other freelancers (who might even have too much work, so pass some to you!).
Either way, business groups are a great free resource you can easily dip into.
Buy re-loved equipment and tools
Depending on your line of work, consider opting for refurbished or secondhand equipment.
For example, if you are a freelance woodworker, you don’t necessarily need to spend $$$ on the latest highfalutin laptop when a refurbished one can do the job just as well.
Take stock of what you are spending money on and see if there’s the possibility of using secondhand or re-loved equipment.
As long as the equipment can do the job just as well as a brand-new one, this is an excellent way to save money and reduce expensive outgoings and upgrades.
Prepare for taxes and know what’s tax-deductible
Benjamin Franklin famously once said that there are two things certain in life: death and taxes.
So we can at least prepare for one of them – in this case, taxes. Make sure you put money aside to cover your taxes and ensure they are paid on time to avoid any potential penalties.
Another good strategy is to know what expenses are tax-deductible. A good accountant can help with this, but generally speaking, some business expenses are tax-deductible, so knowing them in advance will allow you to manage your finances and make informed decisions before spending money on things such as business travel, health insurance, retirement contributions, and professional development.
If in any doubt, speak to a professional accountant. A good accountant is a great investment, one that can save you a lot of time and money!
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