One of the biggest benefits to starting a home based business is that it costs a fraction than other brick and mortar ones. You are saving on rent so overhead is very low, for instance. And when you can keep the costs down, you can be competitive and grow the business.
But, it doesn’t end there. There are so many ways that you can cut costs and operate in a way that gives you much bigger profit margins. And when you can pass those savings onto your customers or clients, then you can make more money over the long term by keeping them happy.
In this article, I will go over several ways to keep your costs down while running a home based business.
1 – Save on your vehicle
If you rely on your car to get work done, then it can be quite the expense. Between insurance, gas and maintenance it can end up being one of the biggest drains on your ledger.
You should definitely shop around for car insurance and take deals as they come. It may be a pain having to switch companies frequently, but it will help your bottom line.
Another easier way is to use points for gas or even get free gas cards to fill up on the cheap. You can save money on gas by using credit card points or even gas cards that give you a discount.
2 – Pool resources
You should really be networking with other small businesses for a number of reasons, but to save money it really pays off. Many things can be discounted when you buy in bulk. You may not need a lot at one time though so you can pool with other businesses to buy things together that you all need.
Even non physical things like services can be done together. Why not use the same freelancing accountant and see if you can get a group rate?
You don’t even need to do this with the competition as there is usually lots of overlap on things just about any business needs.
3 – Pay invoices as they come in
For most orders, you are given a 30 day or 60 day window to pay an invoice. And sometimes having that time is very helpful. However, many purveyors will offer a discount when you pay as soon as you get the bill.
Over time the 5% or even more that you save on these bills will add up to quite a substantial savings.
4 – Use high energy appliances off hours
If your home business relies on appliances or tools to make things, then you can save quite a bit by using them at odd hours. If you can manage to wait until after 8 pm or so, then the electricity rates go way down. Sometimes by half.
This can end up saving you quite a bit off of your monthly utility bills. Also, weekends are a great time to use high energy demand tools as the rates are much lower.