1. Review all your outgoings

A review of all your costs, both fixed and variable, can identify expenses that are either a) now superfluous to your business, i.e. a business subscription you no longer need, b) you could get a better deal elsewhere, or c) more favorable terms could be negotiated with vendors. 

Regularly reviewing your expenses is sensible even when your business is doing well, because even if you only save a small amount, it will accumulate over time. The same goes for costs – they build up over time.

Furthermore, it’s sensible to plan ahead and know exactly what costs are due and when, and ensure you have a positive cash flow to cover them. You should also budget for contingencies, i.e. emergency or unexpected costs.

2. Use free or inexpensive online business tools

There are some great business tools available online to help you run your business. However, some tools are designed for larger organizations and therefore come with a bigger price tag that doesn’t take into account freelancer budgets (or their requirements). Nevertheless, there are plenty of free and freemium products available that you can take advantage of on the open market.

Take invoicing software, for example, why overpay just to get paid? Invoice Ninja is a leading free invoicing software designed specifically for small to medium-sized companies and freelancers.

We offer a range of payment gateways, allowing your clients to pay you with just one click, without leaving their client-side portal. You can choose from multiple currencies and languages for international clients, and transform quotes into invoices at the click of a button. You also get professionally designed invoice templates and a personalized dashboard, plus much more.

See all our features here and try Invoice Ninja for free here.

3. Review how and where you operate

If you need a lot of equipment or resources to perform your work, you might want to consider how you can use them or procure them more cost-efficiently.

For example, instead of purchasing a brand-new laptop or machinery, could you operate just as well with something refurbished or recycled and therefore less expensive? Likewise, if you need something that you cannot operate without, consider shared ownership with another small business or freelancer. It could be that you use equipment or tools that you can conveniently share with others. 

Another overhead is working space. Instead of paying high rent for work premises, consider a coworking space or even a home office to reduce travel costs, if practical. Although working from home can reduce travel costs, you’ll also need to take into account the extra utility costs. Coworking spaces represent a middle ground and can also be good for networking with other freelancers.

4. Outsource time-consuming tasks

If an admin task is taking you a lot of time to perform, it’s costing you your time and, therefore, money. 

Outsourcing time-consuming but necessary tasks could work out as the cheaper option. If you calculate the time spent and your hourly rate versus the cost of outsourcing, you might be pleasantly surprised.

Outsourcing can give you back your valuable time and therefore save you money. 

Another advantage of outsourcing is that you can benefit from the expertise of others. For example, if you hire a professional accountant for your accounts and bookkeeping, they can actually save you money with their accounting knowledge and advice.

5. Make use of social media

Traditional marketing methods typically include print advertising (think newspapers and magazines), event marketing, and TV and radio commercials. These marketing methods, while effective, are not free and can use up a significant amount of your marketing budget. Even local leafleting has a cost.

Social media accounts, on the other hand, are free to set up, and even if you don’t use their paid ads to generate sales, social media marketing can still be a super effective way to market your business, remain top of mind, and generate leads. The only cost is your time. Again, this is something you can outsource.

Read more about how to market yourself on social media at our blog post here.

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Sticking to your budget, applying cost control and keeping an eye on the bottom line will help ensure your expenses don’t get out of control and help lay the foundations for your freelance business to thrive.

It may be tempting to splash out on vanity purchases such as an all-singing, all-dancing website, but until you get established and have a healthy cash flow, here are 5 ways to cut costs and save money as a freelancer.

Reduce unnecessary outgoings

Before launching your freelance career, try to reduce or eradicate personal debt such as credit cards, loans and overdrafts.

You will not be able to rely on a monthly salary to pay for these outgoings as a freelancer, so it’s essential you know what your monthly outgoings are so you can plan to reduce or stop them. You should also consider canceling costly and non-essential subscriptions.

Likewise, it makes sense to save as much money as possible before you go freelance.

It could be that you work part-time for a while or launch a freelance career while still employed full-time. This is especially the case if you have a family or dependents that rely on your income.

The point is to have a buffer fund to rely on for the slow months or the dreaded freelance feast and famine cycle.

Use free online tools

Many Software as a Service (SaaS) tools have a free version you can use when running your freelance business.

Some online tools, such as Libre Office, are completely free, which you might want to consider (assuming it has all the features you need).

You can use the free version of Canva for graphic design for your social media marketing and the free version of Grammarly to proofread documents and check for errors.

Likewise, choose the free plan offered by email software providers to set up your email newsletter to inform potential clients of your latest news and offers. These are all powerful marketing tools that you can use for free.

Nowadays, you don’t have to pay for video editing or film-making either. You can simply make videos with your smartphone and post them on social media. While you might want to upgrade later, when you are on a budget, it makes sense to use the free tools at hand.

The same goes for invoicing.

Invoice Ninja is a leading free invoicing software for small business invoicing, online payments, tracking expenses and billable tasks. It also includes attractive, professional invoice template designs you can customize with your logo and brand colors.

Try it out for free here.

Join free business groups

There are plenty of business groups online (for example, Facebook and LinkedIn) that you can join for advice about freelancing in general or your specific niche or skill, for example, copywriting.

You can ask questions in most of these groups and learn from other freelancers’ experiences. Learning from other people’s mistakes is a less costly way than making your own, especially when it comes to pricing your services, sending client proposals and dealing with late payers.

You can also learn a lot from other freelancer’s content and processes, so it can be a good idea to sign up for their email newsletters, especially if they specialize in helping freelancers get clients.

It’s also a great way to network with other freelancers (who might even have too much work, so pass some to you!).

Either way, business groups are a great free resource you can easily dip into.

Buy re-loved equipment and tools

Depending on your line of work, consider opting for refurbished or secondhand equipment.

For example, if you are a freelance woodworker, you don’t necessarily need to spend $$$ on the latest highfalutin laptop when a refurbished one can do the job just as well.

Take stock of what you are spending money on and see if there’s the possibility of using secondhand or re-loved equipment.

As long as the equipment can do the job just as well as a brand-new one, this is an excellent way to save money and reduce expensive outgoings and upgrades.

Prepare for taxes and know what’s tax-deductible

Benjamin Franklin famously once said that there are two things certain in life: death and taxes.

So we can at least prepare for one of them – in this case, taxes. Make sure you put money aside to cover your taxes and ensure they are paid on time to avoid any potential penalties.

Another good strategy is to know what expenses are tax-deductible. A good accountant can help with this, but generally speaking, some business expenses are tax-deductible, so knowing them in advance will allow you to manage your finances and make informed decisions before spending money on things such as business travel, health insurance, retirement contributions, and professional development.

If in any doubt, speak to a professional accountant. A good accountant is a great investment, one that can save you a lot of time and money!

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