Keeping check of the expenses and managing efficiently cost can help increase profit for freelancers. So here are the 10 cost cutting measures every freelancer should follow.
Outsourcing may seem costly when compared to a salary of individual but it actually isn’t if you add the other hidden expenses that come along when hiring.
You may get a quote of $200 for a week of work and you may be able to find a full-time employee for $200. A simple calculation may be that you are paying 4 times when outsourcing. Is true from a salary point of view but what happens when you associated the extra cost that an employee adds. Consider these 10 points before hiring vs outsourcing.
2. Pay bills on time
Late payment charges can add up too fast and can increase your expenses. Automate the process of bill payments so even if you miss to pay the bill, you aren’t paying the late charges.
The way I do it is to have all my bills paid automatically from my credit cards and last Saturday of each month I pay all my credit card bills. Even if I forget to pay my credit card bills it is setup on auto debited from my bank account so I avoid late payment charges. Still I prefer to manually pay my credit card bills for the sake of tracking my expenses.
3. Delay the purchases
I have always been an instant buyer where I have very little time between decided to purchase and order being placed.
I had made many purchases in the past that could have been avoided provided I had given some time before placing the order.
Now I follow to place an order the other day. So if I decided to make a purchase today, will order it tomorrow. This gives me time to sleep over the idea before making the final decision to purchase.
4. Use SaaS
Software as a Service or SaaS can not only save money but helps save a lot of time as a freelancer.
I prefer to use Canva for images for my blog instead of outsourcing or hiring a designer to design those beautiful images for each of my blog post. It not only helps me save money but also saves me a lot of time where I have to interact manually to explain what I need and iterate and interact with the designer to get it done.
If you can find software that can do what you want to be doing, never try doing it manually.
5. Track expenses
I track my expenses using a simple excel sheet which shows me the complete business expense at a glance to help me spend every penny efficiently and also find areas to reduce expense as and when needed.
6. Open source vs paid softwares
Before making the final decision to buy a paid software look for a free or an open source alternative.
I used MS Office when I was on Windows but when moved over to Mac, I started using OpenOffice as well as moved over to Numbers (Excel), Pages (Word) and Keynote (Presentations) which are free to use on latest MAC.
Similarly, I used Visual Studio and EditPlus on Windows but on MAC I switched over to Netbeans, XCode and Bracket which are all free.
7. Invest in backups
An Investment as a cost-cutting measure is surprising but with a decade of experience in software development, the nightmares happen when you don’t have enough backups.
What happens if
- Your system doesn’t start tomorrow?
- Server is hacked.
- Your site is compromised.
If you don’t invest time and money doing backups, you are working in a very risky environment and if antyhing can go wrong, it will go wrong at some point.
A regular backup plan is always recommended because it helps you save time and money in crucial time.
Backups can be as simple as having an external drive where you backup your computer data on a weekly or monthly basis or you can opt to store backups online on Amazon S3 or on a server.
Hosting accounts and servers should always have a regular backup plan but if you just starting out and don’t want to be spending on backup plans, do a manual backup.
8. Save overhead of rent
The biggest expense in India for new businesses is rent.
Always be on a hunt to reduce it and if you can’t, be ready to avoid an increase in rent and move out to a different location. It can help any new business remain afloat for a very long period of time.
Avoid having fixed furniture at a rented place that cannot be moved over.
9. Diversify income stream
Having more than one source of income always helps. Make sure you invest a considerable amount of time and money to have more than one income stream.
Though my income is well diversified with direct clients, Upwork clients, consulting clients, income from blogs through products and affiliates, ad revenue from forums etc. I still prefer to diversify my income by investing in equity market or generating rent income by investing in real estate. If you want to start involving on the real estate industry but need a loan view website to get help.
10. Invest in yourself
Online landscape has always been in a flux but the most important point to note is the speed at which it changes. Invest good chunk of your time, money and energy in educating yourself to the new technologies, new software, new services etc.
- Go4Expert was on vBulletin, moved over to custom solution build on vBulletin and now has moved over to Xenforo. As a developer I had to move my expertise from vBulletin to xenForo.
- I was a trader who traded based on price action strategy but as my capital increased and I was short on time, had to make a move to be a long term investor.
Over to you
How do you cut the cost? Share them in comments below.