Many people are unaware of what home-based businesses are and how they function. This perception has been changing over the years. Moreover, with the power of the Internet, cloud computing services and changing business cultures, it has become easier to manage almost any business from the comforts of your own home.
However, if you are planning to start a home-based business or are already running one, our concerns are directed towards your business finances. We believe that there are multiple huge opportunities for a home business to save money, something which is often necessary for a start-up company. If you don’t recognise these opportunities soon, chances are that you will get carried away and might even put your business at a disadvantage.
As we all know, business expenses determine a company’s profitability. Since you are a start-up, you may not be bringing in much revenue, because of which you need to be extra careful while spending your money and invest your returns in a strategic manner.
In case you don’t have enough capital to run your business operations smoothly, we suggest you to seek funding from alternative finance lenders. There are many alternative finance firms, such as nucleus finance, that offer funds to start-up companies at a lower rate. If you aren’t comfortable in seeking secured business loans, then you might as well use our saving hacks.
Following are five ways of saving money for your home-based business:
1: Never Go Overboard With Your Home Office
Many people managing a business at home have ideas of designing their home office in such a way that it looks like it belongs in Forbes Magazine. We understand and recognise the importance of having a well-designed office, but we suggest you not to go overboard with it.
At bare-minimum you need a bedroom with a desk, computer, printer, filing cabinet and other few essential tools. Don’t worry! You surely will have time later on to spruce things up design wise. But as of now, investing a fortune into an office is a complete waste of resources.
2: Shop and Compare Home Service Providers
This should be done regardless of the fact that you are running a home-based business– shop and compare the best home service providers in the market. There are few ‘simple to use’ online tools that help you find and compare prices of internet providers based on your requirements. There are different providers that offer the same service at a varying price. There is certainly no point overspending here, so choose wisely!
3: Request an Energy Audit
There are many energy companies that offer free home energy audits. It is their responsibility to help customers maximise efficiency, so its better you call them and have your home’s system examined and look for any possible air leaks.
Since you will be spending most of your time at home managing your company, it makes sense that you would want to conserve energy and eventually save on your power bills.
4: Take the Home Office Deduction
When you are filing your tax returns, make sure that you consider your home office deductions. Although it might not save you a lot of money, but it will surely save you some money. There is a standard method that allows you to track and calculate the direct and indirect expenses that affect your home office. This includes your bills, taxes, mortgage interest and so on.
Another simple way of calculating home office deductions is where you deduct the square footage of your home office at £5 per square foot. Comparing both the ways, people usually find it easy to calculate using the simplified option. Choose an option that is easy for you to understand.
5: Pool Your Purchasing Power
Well, one of the disadvantages of running a company at home is that you don’t typically require large quantities of supplies. It means that you don’t qualify for wholesale discounts, something that is very necessary if you are striving to keep the costs down.
To avoid this dilemma, we suggest you to pool your purchasing power with other small business owners that you know in your area. Since you will be purchasing everything in bulk, things such as printer paper, ink and shipping supplies, you get them at a wholesale rate and the amount can then be divided among each contributing member.