23 Ways Freelancers & Agencies Can Get Cost Savings Now

Running a small business is hard. And expensive. There’s also a fair amount of risk involved, and sometimes, you need to cut costs right now, and you can’t wait.

Been there, done that. Sure, cost reduction isn’t fun, but sometimes, you’re in a tight spot with cash flow and you just need to get to next week. 

Or maybe you’re thinking more long term. Maybe you’re just sick of pointless small business expenses and excessively thick financial statements with too many line items. 

Whatever the case may be, this guide contains a list of ideas to help you start saving money now.

Quick Note: As with my other posts, my assumption in writing this is that you’re in the US, running a freelance or small agency operation. You’re probably a sole proprietor or single-member LLC. The vast majority of this will still apply even if that doesn’t describe you.

1. Start tracking your finances.

If you don’t already track your business expenses and revenues, then you need to start. Building a tight process for expense tracking is the #1 thing you can do to truly understand where your money is going.

Actually taking the time to regularly track your finances matters more than exactly how you do it. The process of tracking your finances alone will make you aware of next steps you can take.

Easy Step 1: Read this guide on the best way to keep track of small business finances.

2. Lower your taxes.

Like or not, you have to pay taxes. And if you’re running a business and it’s your primary source of income, you probably have to pay taxes on a quarterly basis. Furthermore, if you’re paying quarterly taxes, you’ve probably found out that saving up a little money every week for those quarterly payments makes life easier when they’re due.

So if you want to feel like you’re saving money right now? Find ways to save on taxes so you won’t have to save so much up in the first place.

Easy Step 1: Figure out what you can and cannot deduct.

3. Cut unnecessary software subscriptions.

Subscription charges will sneak up on you. They’re not evil and you shouldn’t avoid them entirely, but you have to make time to audit your subscription expenses, preferably on a monthly basis.

This alone can really help you lower your operational costs.

Easy Step 1: Cancel one subscription service.

Never ask stock photo sites to "cut costs" for you.
Never ask stock photo sites to “cut costs” for you.

4. Switch regular expenses from monthly to annual.

Many services offer discounts for annual payments over monthly. This is especially true with software subscriptions. 

Switching to annual billing can save you a lot of money in the long run. However, think about the cash flow implications before you switch to annual – almost every vendor is going to charge you more upfront for it.

Easy Step 1: Find one subscription that you can switch from monthly to annual.

5. Negotiate lower fees with your payment processor.

You’d be surprised how often you can do this. Major payment processing systems will often lower your transaction fees if you ask them to. I was able to negotiate lower rates on credit card payments made on my invoices with QuickBooks. Even though it was a very modest decrease, the end result saved me several hundred dollars last year alone.

Just be aware – you are probably going to spend a lot of time in live chat or on the phone. Payment processors will not make this easy for you.

Easy Step 1: Contact your payment processing provider to negotiate lower rates.

6. When buying new software, add it to your cart, leave the page, and come back.

A lot of online software companies actively try to reduce cart abandonments. One of the less subtle ways they do it is to lower the price after you abandon the page and then come back. Other variants include sending you a targeted email after you leave the site, assuming they have your email address.

This trick probably won’t last too much longer since people are catching on. But while vendors are still doing it, you may as well give it a try.

Easy Step 1: Abandon cart!

7. Tighten your contract terms to reduce the risk of non-paying clients.

Deadbeat clients will drag your business down, no questions about it. And no contract terms are going to be solid enough to prevent you from getting stiffed in all situations. But the more specific you are, the less likely clients will fail to pay you (or pay you late).

This is one of those tips that nobody likes to think about, but it will make a difference. If you’re using accrual accounting, you won’t have to write as much off as bad debt, and if you’re using cash accounting, this will ensure that you receive, well, cash.

Easy Step 1: Review your contract terms and close loopholes.

8. Hire new workers as contractors first.

Hiring full-time workers is expensive, especially when you factor in unemployment taxes, worker’s compensation, supplies, social security, healthcare, and other benefits.

Contractors charge more than employees, at least at first glance. But that’s because none of the expenses previously mentioned – except for possible supplies – are incurred. Plus, if they’re not a good fit, it’s a lot easier to terminate a contractor than an employee.

(Just be sure you don’t treat contractors like employees without benefits by doing things like dictating their schedule. That can actually get you in a lot of trouble!)

Easy Step 1: Consider hiring contractors when it’s not necessary to hire full-time employees.

9. Barter services with other businesses.

If you exchange services with other businesses, you can both build your network and reduce your upfront expenses. The specifics on how this plays out, of course, will depend on the businesses and your relationship with them.

Easy Step 1: Find businesses that are open to bartering.

10. Buy refurbished electronics.

You may need certain supplies like phones or laptops for your business. You shouldn’t avoid buying those, and I’d even argue you shouldn’t go cheap on them. However, if you need to save a little money without compromising the overall quality of the equipment you are using, refurbished electronics might be a good fit for you.

Easy Step 1: Shop for certified refurbished products.

A lot of refurbished products have new parts.
A lot of refurbished products have new parts.

11. Track your business mileage.

If you use your personal vehicle for business purposes, you can deduct a fair amount of money for each mile that you drive. To do this, you will want to keep meticulous records of business-related mileage to take advantage of deductible expenses, reducing your taxable income.

Note that this deduction is taken in lieu of paying for gasoline with your business card. But if your car is even moderately fuel-efficient and gas prices are not at an all-time high, then the tax deduction will probably save you more.

Easy Step 1: Use a mileage tracking app.

12. Use energy-efficient equipment.

Depending on the nature of your business, the equipment you use may consume a lot of electricity. And that is often charged per kilowatt-hour (kWh) of energy consumed. If you can reduce the amount of kWh that your business equipment uses up, you may very well end up saving money by buying up-to-date equipment.

Easy Step 1: Look for equipment that uses less kWh while operating.

13. Set benchmarks for marketing performance and eliminate campaigns that do not work.

You need to spend money to make money, but you don’t need to spend an infinite amount of money. Marketing campaigns that don’t work, especially expensive ones like advertising, need to be cut off sooner rather than later.

Set some performance metrics and be deliberate about how long marketing campaigns will be allowed to go on. For the campaigns that don’t perform well enough, cut them off.

Easy Step 1: Set marketing benchmarks around expected return on investment.

14. Join professional associations for group discounts.

Professional associations are obviously good for networking, but you would be surprised how often you can get discounts by being a member too. The kinds of people who spend time at Chamber of Commerce mixers tend to be tight-knit and well-connected. Sometimes that results in exclusive savings!

Easy Step 1: Research professional associations in your area.

15. Search for government grants and subsidies.

There’s free money out there if you know where to look. Seriously, the government often hands out grants and subsidies that can help cover everything from marketing to tech upgrades. It’s worth the effort to dig into what’s available—you might just find yourself lucky enough to be able to apply for one.

Easy Step 1: Review Small Business Administration grants and see if any apply.

16. Document your processes thoroughly to reduce training costs.

This won’t save you money right this second, but it can dramatically cut down on future costs, and set you up to generate more revenue in the long run as well. How you will go about this depends on your type of business, but as a general rule, if you can document how to do something, you should. It’s better to have the information and not need it, then need it and not have it.

Easy Step 1: Write standard operating procedures for the most common processes in your business, even if it’s all administrative.

Tools like Canva have lots of process diagram templates if you prefer something more visual for your documentation.
Tools like Canva have lots of process diagram templates if you prefer something more visual for your documentation.

17. Work fully remotely if you can.

If you haven’t gone remote yet, you might be missing out on some serious savings. Ditch the office lease and utility bills. Plus, your team might just thank you for the commute they get to skip.

Easy Step 1: Dedicate part of your home as an office space.

18. Regularly review and optimize your workflows.

If you’re trying to save money, it’s worth considering how smooth your operations are. You may have opportunities to streamline how you do things that can save time and money in the long run, or possibly even the short run, depending on how much needs to be changed!

Easy Step 1: Schedule a day to review your workflows.

19. Carefully review your health insurance options.

If you’re reading this and open enrollment is coming up, you might want to take a close look at your health insurance. It’s tempting to spring for the nicest plan with the most coverage, but you might not actually need all that.

Take the time to compare plans to find one that is both affordable and covers everything you and your team need. This is not easy, but if you’re a US-based business owner like me, this probably ranks among one of your top 10 expenses and it’s easy to avoid scrutinizing it just because it’s so complicated.

Easy Step 1: Compare insurance plans more closely next time open enrollment arrives.

20. Save for retirement.

This might sound weird if you’re trying to cut expenses, but saving for retirement can truly cut down on how much you owe. Retirement accounts are often tax-deductible, so putting money into them lowers your taxable income, and therefore, the amount of tax you owe and have to save up for on a regular basis.

Easy Step 1: Open a retirement account such as a SEP IRA or solo 401(k).

21. Create service packages based on low-cost processes.

It’s much easier to sell your services when you take the time to put them together into service packages. That can make revenue generation quite a bit easier.

But did you know you can also save money by doing this? You really can—all you have to do is optimize your service packages to be based on processes that don’t cost you much to execute.

Easy Step 1: Develop one new service package.

22. Incentivize referrals to cut customer acquisition costs.

Why not cut down on marketing spend by getting your clients to do some legwork? Set up a referral program that rewards them for bringing new business your way. It’s cheaper, and in my experience, I’ve found that referrals usually make for the best kind of clients.

Easy Step 1: Research referral programs in your industry.

23. Use tools like Ibotta and Rakuten to get cash back on certain purchases.

Cash-back apps like Ibotta and Rakuten are shockingly easy to use. You’re probably buying goods for your business right now, so you might as well get some cash back while you’re at it. These apps offer rebates on all sorts of purchases, and while you’ll never get rich on these apps, every little bit still adds up!

Easy Step 1: Sign up for a cash-back app.

Final Thoughts

If you’re looking to save money as a small business owner, you have tons of options. Pick a handful that you like from this guide, and calculate the cost savings you’ll receive by implementing them. You might be surprised how quickly it can add up!

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