The gig economy is growing ever stronger, and there are more entrepreneurs setting up in business than ever before. There’s no doubt about it, this is the age of being your own boss, and an incredible study in the UK found that more than three quarters of businesses do not employ anyone.
A similar pattern is emerging in the US and across the globe, and while the freedom of working as a freelancer or a sole trader can be liberating, there are also financial challenges that come with it. Smart budgeting is certainly key, but there are some costs that just can’t be avoided. That’s not to say, however, that they can’t be significantly reduced with a little bit of imagination.
Shop smart by shopping around
We humans are creatures of habit. We go to the same old store to buy our groceries and use the same companies to but our home insurance. At least that used to be the case, but today, the retail market is more competitive than ever, and price comparison websites spend thousands on advertising campaigns to encourage us to shop around.
The same applies to those essential business expenses. Whether you need a new office printer or a better wireless router, don’t just head for the local IT store. There are better bargains to be had online, and if you choose a reputable B2B marketplace like Probrand, you know you won’t be compromising on quality just to save a few bucks. Everything is from big name suppliers, and you can get the warranty you need, just the same as in a high street store or when buying from a business supply firm. The only difference is that when you buy online it is usually far cheaper.
Think smart on tax
Freelancers often overlook the fact that many of their everyday expenditures can be offset against tax. In fact, this applies to practically anything you use in the course of your work. Naturally, that will include IT equipment, business insurance, marketing costs, business travel and so on. But there is potentially more.
Most freelancers and many sole traders operate from home. This means you can offset a proportion of your domestic expenses as tax-deducible. Utilities, including home heating, telephone and internet connection are one example, but you can even include a proportion of your mortgage interest or rent. It can add up significantly.
Having said all that, avoid falling into the trap of thinking that just because something is tax deductible, it is OK to purchase it. For the small business owner, cash flow trumps all else, so if you are having a tight month and that purchase can wait a few weeks, then let it wait.
The other point to remember regarding tax is to get your tax return completed sooner rather than later. It is so easy to leave it till the last minute, and end up hurrying through a pile of receipts. All you will do is miss something, and either attract the unwanted attention of the authorities or end up with an unnecessarily high tax bill.