Working from home is convenient from many points of view: no more commuting during the rush hour, no need to dress up in a business suit, and more free time to spend with your family and doing your hobbies. It also means that your overall costs increase – especially on the heating, electricity and internet bills.
These costs can cut a serious margin from your earnings and leave you with an unsatisfactory amount of money at the end of the month. You may even consider abandoning your work-from-home business and getting a full time job instead. Before you abandon your dreams and resign to the second best option, find out how to reduce your costs when working from home. These 5 simple and easy tips will help you save money and turn your home business profitable.
1. Control the Use of Heating and Electricity
As you spend more time at home, you will see a significant increase in your heating and electricity bills. The best option to manage these costs is to control the usage of these utilities throughout the rest of your house.
For example, you can turn down the heat in every other room in the house except the one you use for your home office and set timers for all lighting appliances, so that they go off in case you forgot to switch them off manually.
It may not seem significant, but these little changes can save you a lot of money in the long run.
2. Buy in Bulk
You need various supplies to perform your work in good condition – such as paper, cartridge ink, staples, paper clips, pens, and other similar items. If you buy them item by item in small quantities, you will get the retail price (which is the highest price at which any item is sold). If you go to large suppliers and buy in bulk, you will obtain significant discounts.
So make a list of all the supplies which have a long shelf life (at least 8-12 months) or which do not have an expiration date, and buy them in bulk to last you at least half a year.
3. Do Not Invest in Expensive Equipment
You will not impress your potential customers if you reply to their email from the latest iPhone model, or if you prepare or print your offers on the most sophisticated and expensive computer and printer available on the market.
You need affordable equipment which helps you do your job well and which, more importantly, have a good return on investment rate. What does it mean? If you cover the cost of a new computer with the profit you make in one year, that is a good ROI. If you cover this cost in five years, that is a bad ROI.
4. Save on Tax by Including Home Bills in Your Accounts
As a self-employed person, you have the right to include some expenses, such as internet, phone and electricity, in your accounts. This will, in turn, help you pay less tax. For every type of business, home-based or office-based, the accounting rules are the same: you have revenues and expenses, and some of these expenses are tax deductible.
If you are not sure how much of your bills you can include in your home business accounts, consult an accountant – it is a good and worthy investment.
5. Barter
Small entrepreneurs have to support each other to succeed, and in most of the cases they do that. For example, if you offer free advice to a small mom and pop store about how to make their computer run more smoothly, they will allow you to place an ad for free in their shop window or advertising board.
These small barters help a lot of home-based businesses and small enterprises cut a lot of costs and become more profitable. Since there is no direct competition, you do not have to have second thoughts about exploring this approach.
And in these five simple and effective ways, your small home business can be profitable enough so that you will not feel tempted to return to a regular 9 to 5 job.