When you’re self-employed, having a security blanket in the form of savings is essential. But how can you make sure you’re putting aside enough money while running your business effectively? If you struggle with managing your finances and putting aside cash, these tips can help you to build up a buffer for increased peace of mind.
The best tool you can invest in for financial management is accounting software that helps you to keep track of all the money you have coming in as well as what you save. This website offers software solutions ideal for small businesses that gives complete visibility over cashflow, helping you to understand exactly how much you have to spend. From here it’s easy to work out what percentage you can afford to save, allowing you to budget sensibly without compromising on your current lifestyle too much.
Beware of Loans
If you’re short on money it can be tempting to take out a loan to boost your income, but this can only lead to more trouble further down the line. Loans should never be a substitute for savings, but they can be used to invest in your business. If you need to make some changes to drive growth, a loan could be the right decision for you. But if you’ve failed to put aside cash for a rainy day, a loan is likely to make your problems worse further down the line when the money runs out.
Depending on your profession, working remotely could be just as viable as renting a physical office. Offices can be expensive, so if you have space at home then turning your spare room into a workspace could free up some cash that you can then set aside. If working at home isn’t an option for you, consider working from a local library or café. And if you do need to meet a client in a professional setting, there are plenty of spaces that can be hired on a temporary basis for those meetings. Co-working spaces are also rising in popularity and can be more cost-effective than hiring a private office.
Are you looking to expand your business? Hiring an employee to take over your admin or marketing might seem like a good idea, but it could actually be more expensive than you think. If you need someone to take care of something specific in your business, then outsourcing this task could be more cost-effective. This way, you have more flexibility and can control the amount you spend. A permanent employee will work on a regular basis and require a consistent salary, but many freelancers and agencies are open to shorter contracts that can be stopped and started.
If what you need is really an assistant to take care of odds and ends, you can hire a flexible virtual assistant to support you digitally. At some point, you might reach a point where your business has grown enough to hire staff, but when you’re just starting out, savings are key.