Does it seem like everyone has a home business these days? You’re half right. About 50% of companies are run from the founder’s primary residence. If you are one of those intrepid entrepreneurs, congratulations. You already save money by not paying rent for an office space or daily commute. However, you cannot afford to leave other dollars on the table. That’s why it’s necessary focus on frugality.
Being careful about what you spend your finances on can significantly boost your net income. Even if you can only hold on to 5% more per year, you’re ahead of where you were. Fortunately, it doesn’t take much work or sacrifice to trim a few pennies here and there. By making just a few tweaks, you could see significant payback.
1. Keep all your business receipts.
Let’s start by talking about “tax time”. It’s not as dreaded as you may think, especially if you run your business from home. The federal government allows you to have a home office tax deduction as long as you meet all its specific requirements. This immediately saves you money and puts you on the right track.
Make sure you stay on track by keeping copies of all your business receipts. Whether they’re on paper or digital, you’ll be glad you put them away. In fact, they give you two very important advantages. First of all, they make sure you don’t miss any deductions. It’s easy to forget that you spent $5 on a new pack of highlighters 10 months earlier. Having a receipt boosts your memory. Second, you’ll need to present those receipts if you’re ever asked to provide proof of the expenses you’re deducting.
2. Reduce your energy costs.
Depending on your home office setup, you may be able to deduct some of your utilities from your taxes. Or, if your home office is an actual separate building, like a former carriage house in your side yard, you can deduct all those utility costs. Still, you don’t want to overwhelm your energy suppliers with money every month.
A good way to reduce your energy costs without incurring any inconvenience is to look for alternative energy sources. For example, you can invest in solar panels that eventually pay for themselves. What if you don’t have cash on hand to pay the money for an installation? PosiGen, an emerging leader in the solar panel installation industry, offers a unique leasing arrangement where you can get panels – and savings – instantly with little down. Another quick way to reduce the need for something like air conditioning is to keep your windows open on temperate nights. You will spend less time running your HVAC equipment.
3. Buy all your supplies in bulk.
You may only need one ream of paper at this point. But what about in the future? Would it be beneficial to buy a box of 10 packs to get the discount? If you use paper and haven’t moved to a paperless office environment, your answer will probably be “yes”. After all, going for bulk delivery can significantly reduce your per-unit price tag.
You may want to join a membership-only warehouse like Sam’s Club or Costco to get big savings. Amazon Prime can also be valuable at times, depending on what your regular office needs are. Do a little “number analysis” to see how you can lower the amount you pay for each type of supplies you use.
4. Treat yourself to second-hand furniture.
Many companies do not go bankrupt, but sell their office equipment. Why? They are making the transition to become remote-only or hybrid companies. All around 25% of companies are supposed to offer their employees some form of flexible scheduling. As a result, they just don’t need all the desks, chairs, and filing cabinets they once had.
This is where you can pop in and pick up great bargains. Try browsing Facebook Marketplace or eBay. Or try going “old school” and poking around your local or nearby Craigslist. Etsy can also sometimes feature some upcycled finds. If you hear that a business is closing in your hometown, drop by or call. The owners may want to unload some of their furniture. You get one refreshed home office workspace, they get money and your bottom line won’t suffer for the style upgrade.
5. Keep yourself on track.
Is time really money? Absolutely, especially if you are in business for yourself. The more efficient you can be with your time management, the easier it will be to handle all your responsibilities. That’s why it’s so important that you keep yourself on track with a digital or physical planner. Having a calendar keeps you focused on what you need to do and reduces the chance of wasting your work hours.
You don’t have to feel bad if you struggle with time management. Even great entrepreneurs have their shortcomings. A good way to get on track is to put all your to-do items in a daily list. Mark them by priority and schedule them throughout the day. Make a new list in the evening and plan for the next day. Eventually this process will become routine. If so, you will make your professional and personal life run more smoothly.
6. Invest in AI-based software.
Another way to give yourself more time is to invest in software to do some of your manual tasks. Many home business owners assume they cannot afford AI-based systems. Not true. Some programs are free or cheap to use and can be extremely beneficial.
Perhaps the most emerging of all these tools is ChatGPT. Although there is already one much discussion on ChatGPT’s promises versus its issues, it’s clearly worth tinkering with. A safer way to lean into AI is to find out which of your current tools has or plans to integrate AI into its system. MarketMuse, a content planning and optimization tool, recently launched a version with ChatGPT integration. The update allows users to create outlines and optimize content without investing more hours, making it a great time-saving option for business owners.
7. Consider different payment options.
How you get paid can save you money or cost you. Now is a good time to take a deep dive how you receive payments from clients or customers. Do they send you checks? Do you accept money through a service platform like PayPal? Are you ready to use credit cards for a fee? There are plenty of ways to get the money you owe. However, it is not possible in all ways to put dollars back in your pocket as quickly as possible.
For example, if you receive checks in the mail, you have to wait for them to arrive. Then you have to wait again for them to be processed. This can mean a few extra days between when you deposit your money and when you can actually use it. Who wants to risk a cash flow gap, especially if you’re a small business owner with bills to pay? Even if you have to pay a fee for a faster payment service, you will find that it is worth it in the long run.
8. Spend time on organic content marketing.
You will certainly have to pay for some of your online marketing. For example, it is quite uncommon these days for companies not to have a website. While you can certainly create and manage your own site, you still have to pay something to keep it live. Nevertheless, there are innovative ways to get free advertising. One of them is through SEO measures such as blogging and posting on social media.
Organic, non-paid content marketing can help spread the word about your brand and its capabilities. While you may not be able to completely cut yourself off from paid advertising, you should have the power and value of organic SEO. The better your SEO, the better your visibility will be online. Again, SEO won’t put you in front of people like paid Google or Facebook ads. Still, it can be a good way to temper those other expenses and still be seen.
9. Examine your expenses every quarter.
Three months can fly by when you’re growing a home business. Don’t let each quarter slip without a quick review. Take out your expenses and study them carefully. What were your top five expenses of the past quarter? How much were one-off expenses, such as the purchase of a laptop? How much were ongoing charges? The ongoing charges are the costs you have to think about for the next three months.
Explore ways to reduce your key ongoing costs, if possible. For example, you can negotiate with a supplier or switch to a different, cheaper product. Get imaginative. Remember, you shouldn’t make cuts that jeopardize your effectiveness, product or service quality, or optimization. But some cuts may be reasonable to make, at least for the next quarter.
Spending wisely always makes sense when you are in charge of a home business with limited resources. All you need to do is take a few extra steps and you could end up saving a bundle.
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