Regularly audit your budgets, balances, costs and expenses
It’s impossible to know how you’re performing financially if you haven’t planned a basic budget, or you haven’t checked your business balance in weeks. Managing your money can feel intimidating or overwhelming, but even making some small positive steps will improve your situation and help you feel better about moving forwards.
Schedule dedicated time for your business finances, and make sure you stick to it on a weekly or monthly basis as necessary. Even if you’ve invested in support from a bookkeeper or accountant, it’s important that you oversee everything as the business owner. And if you don’t understand something, always feel empowered to ask your bank or financial advisors. Overcoming your fear of appearing stupid could save you hundreds, or thousands of pounds.
Planning your budget for the next 12 months can be a hugely useful exercise. It gives you more time to prepare for any big business expenses or investment. And it can also highlight opportunities to switch providers, or group together services, to get better deals or savings.
Save on equipment and software
It’s possible to invest in good quality equipment and software for your business without paying the full retail price. But before you shy away from the cost, it’s worth understanding how depreciation and capital allowance apply to physical business assets including computers, vehicles, office equipment and more.
In simple terms, the value of your new product will go down over time, until it reaches the end of its useful life. And this drop is taken into account for your profits and losses, and on your business balance sheet. It’s worth speaking with an accountant to see how this will apply directly to your individual purchases, especially if you’re planning to make a big investment in the near future.
But when it comes to actually buying a new computer, office chair or other supplies, you don’t necessarily have to buy something shiny and new. Choosing refurbished or recycled products could save you on your initial investment, and also helps reduce waste for an environmental benefit.
Sometimes it may be more cost effective to rent expensive equipment for projects until your business can justify ownership. Or you could look at shared ownership with other freelancers, or see if other companies have spare capacity you could utilise.
And when it comes to software, there are usually good open-source projects which are available as free alternatives to industry-standard solutions. While they may be slightly less polished and user-friendly in some cases, they can offer similar performance and results.
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