Home business owners all run into one common problem: running costs. When you’re running a business from home, it can be really hard to manage the overhead expenses without them getting out of control. You need to keep a close eye on things to avoid running into the red and ruining your operating cash flow. 

At the same time, it’s useful to find ways to save money for your small business. That’s what today’s post focuses on; take a look at these simple strategies that’ll save a blooming fortune. 

Don’t Hire, Outsource!

The perfect scenario sees you running and managing your business without additional assistance. You do everything alone, negating the need to hire staff. Does this realistically happen that often? No. Most home business owners reach a stage when they need extra help with one thing or another. Maybe you require assistance with your marketing strategy, or perhaps your general workload is so hefty you can’t manage it alone. 

No matter the reason, you need help - but hiring employees leads to extensive business overhead costs. A recruitment specialist analysed this recently and found that the yearly cost of hiring one employee in the UK amounts to just over £40,000. And that’s with them earning an average salary of £27,000 - so you can see how much extra you need to pay in things like benefits, recruitment costs, National Insurance, etc. 

In a nutshell, it’s way too much for the average home business owner to handle. So, don’t hire, outsource! Outsourcing lets you pick and choose when you need help, and you only pay for the services you’re getting. It saves a literal fortune and keeps your overhead costs as close to the floor as can be. 

Make Use Of Self-Storage Solutions

If you look at some of the biggest home business costs, then paying for storage ends up being a big one. You need somewhere to keep your inventory or tools, so you pay for a business unit. It’s a small warehouse - or possibly part of a shared warehouse - and you’re charged a shockingly high monthly rate. 

You know it’s costly, but there’s not a lot you can do about it. You need the service, so you’re just chalking this down as one of the expensive business payments you have to deal with. However, that’s not strictly the case at all. You’ll find more affordable solutions by renting storage rooms from a self-storage facility. These facilities offer business storage options for small companies like yours, letting you store your equipment, tools or inventory in a secure location. 

Best of all, it’s normally way cheaper than renting a business unit or sharing a warehouse with other companies. Self-storage providers offer flexible monthly costs, and you can always adjust the size of your unit to suit the needs of your business. 

Track Your Expenses For Tax Relief

Sometimes, saving money is more about the long-term benefits than immediate relief. You’re going to have expenses that can’t be reduced or prevented - it’s the nature of running a small business. For home-based businesses, these expenses usually involve: 

• Energy bills

• Outsourcing costs

• Server hosting costs

• General marketing costs

To be fair, you can keep adding to this list until it reaches the end of the page! While it’s not always possible to avoid these expenses, you can use them for some tax relief at the end of the fiscal year. Keep track of your business expenses, and you can list them on your tax return to remove the costs from your overall tax bill. 

For example, your business makes £50,500 this year but has £5,500 in expenses. After deducting these expenses, it means your business pays tax on £45,000 instead of £50,000. In other words, you’ve saved £5,000 over the course of the year. This scenario is especially good because it means you drop your income tax below the higher 40% rate and into the basic 20% rate. So, if you ran the calculations and figured out your tax before deducting these expenses, you’d probably save even more than £5,000! 

Naturally, you must ensure you’re doing everything by the book. There’s a good resource by the LITRG on allowable business expenses that’s extremely worth reading when you’ve got the time. 

Look For Low-Cost Software

Your home business depends on software applications, and many of these are incredibly expensive. Nevertheless, you will always find low-cost or cheaper alternatives to some of the more costly options out there. 

Before you pay for any software, ask yourself two things: 

• Do you need it?

• Is there a cheaper option?

You’ll save a fortune by avoiding software that you either don’t need or won’t get the most out of. Likewise, you can cut the costs even further by picking the most affordable or cost-effective software options for your needs. There’s no denying that digital tools will help you grow your business; you just don’t need to pay through the nose for them. 

Network To Trade Services Or Find Good Deals

We spoke about outsourcing earlier on, but what if you could get even better deals when paying for other people’s/companies’ services? Well…there is! Attend networking events or join LinkedIn and speak to other freelancers or small business owners. You may be surprised to learn how easy it is to strike up mutually beneficial relationships with others. Rather than paying for their services, you could trade your services in return. 

For example, let's imagine your business sells web design services. You find a fellow entrepreneur who’s trying to sell their digital marketing services to clients. Just like that, you’ve got the perfect trade offer: they help with your marketing strategy, and you provide web design services for their clients. Or, you could simply provide web design services to help them create a better website. 

Trades are always possible depending on what you offer and what you’re after. If you can’t facilitate any trades like this, then networking still presents money-saving opportunities. You may be able to negotiate with different professionals and businesses for better deals. Again, they may ask for something in return, or they might provide you with deals in exchange for loyalty. 

Create A Clear Business Budget

We’ve saved the best tip to last: create and follow a business budget. It’s something many home business owners forget to do, but a budget lets you see some key things. 

• How much money are you projected to make every month?

• How much money are you spending every month?

Budgeting ensures you’re not overspending and leading to situations when you’re not making enough money to cover the expenses. That’s what leads to business debt and is a major cause of small business bankruptcy. You need to establish a budget so you can keep a lid on your spending and understand how much money to save. The simple presence of this budget will be enough to help you save a fortune every single month. 

Final word

In conclusion, you’re able to save money in countless ways when running a home business. Saving money is important because it makes life easier for you and puts less stress on your revenue streams. If you overspend, then you’re putting far too much pressure on making enough money to break even or profit. Focus on saving money first, then work on ways to increase your revenue. The two tactics combine to push you in the perfect direct where your expenses keep going down but your income goes up, creating the widest profit margins possible.