Solopreneurship is about as small as a small business gets. As a solopreneur, you donâ€™t just run an entire business, you are the business. This means you are the CEO, accountant, manager, marketer, and what have you. Or, simply put, you wear all the hats.
Sounds scaringly good, right?
The probability of success, however, wonâ€™t sound very promising. You see, small businesses have a tendency to fail. For instance, of all small businesses started in 2014:
- 80 percent made it to the second year (2015);
- 70 percent made it to the third year (2016);
- 62 percent made it to the fourth year (2017);
- 56 percent made it to the fifth year (2018).
Whatâ€™s more, 82 percent of businesses that fail do so because of cash flow problems. Being the smallest possible business, you are extremely vulnerable to cash flow issues. While you focus on bagging more and more clients to keep the work (and money) rolling in, it is equally important to slash unnecessary spendings to maintain and increase profitability.
Ways to Cut Costs in a Small Business
So, here are four fundamental ways to cut costs in a small business including tips to reduce expenses, maximize your budget, and ultimately grow your solo venture.
Use Free Alternatives to Paid Tools
Online tools and apps are at the heart of your solo business. From sourcing clients to getting paid, everything you do involves the use of modern online tools. And for every task, there are countless options available on the market today. Setting up your suite of business tools thriftily can go a long way in maximizing your revenue.
Make sure to take advantage of the cost savings many free (or almost free) tools offer while providing the same capabilities and features as their paid counterparts. Hereâ€™s a tried-and-true toolkit for you to take inspiration from:
- Google Drive: For creating, easily sharing, and safely storing documents, spreadsheets, presentations, etc. It is completely free.
- Trello: Free web app for efficiently managing your projects the Kanban way.
- Slack: A great app for real-time messaging and file sharing.
- Canva: The start-to-finish, beginner-friendly, and free design app for all your social media graphics needs.
- Wave: Free software for all your accounting and invoicing needs.
- Unsplash: The best free collection of stock photos.
- Join.me: An ideal free tool for remote client meetings and screen sharing.
- BuzzSumo: The ultimate tool to source ideas for your content and social media strategy.
- Grammarly: A must-have freemium tool to detect and dodge grammatical mistakes in your emails and content.
- Clockify: Time is money. Track your productivity for free with this neat little app.
- Hunter.io: Find email addresses for pitching prospective clients with this freemium tool.
Reassess Your Work Location
The freedom to work from anywhere and be your own boss is the biggest reason why working professionals nowadays are ditching their conventional jobs and opting to become a solopreneur.
Chances are you have similar reasons, too. If you havenâ€™t already, consider moving away from expensive city life to not only cut costs but to also experience the thrill of traveling and exploring new places. You can quite literally save hundreds (or even thousands) of dollars by shifting to a pocket-friendly (yet beautiful) location.
Some spectacular locations where you can move to easily and continue growing your solo venture efficiently include:
- Hanoi, Vietnam
- Bali, Indonesia
- Buenos Aires, Argentina
- Lisbon, Portugal
When working remotely, consider a co-working space to ensure reliable internet connectivity, among other necessities, is in place. Check out Nomad List, a website specifically designed for researching feasible places to live as a remote working professional.
Outsource with Intelligence
Being a solopreneur does not mean you actually have to do it all yourself. It means you are the only one responsible for getting the job done.
It is safe to say youâ€™re no expert at everything. No one is. But that shouldnâ€™t stop you from taking on projects that still interest you or grabbing lucrative opportunities. If a part of your deliverable requires you to do something youâ€™re not particularly skilled at, or you know you can spend the same time on something else at which youâ€™ll be more productive, you should definitely consider outsourcing it.
Sure, it may appear as an expensive option which seemingly wonâ€™t help in cutting costs. But if the person/agency you outsource the work to does an outstanding job while you work on the stuff which youâ€™re good at, the end result would more than satisfy your client leading to positive reviews and recurring work for your business (aka you).
Besides, platforms like Fiverr are super affordable. Outsourcing work on such well-known platforms is relatively straightforward and safe.
Review Expenses, Rinse and Repeat to Cut Costs
Last but certainly not least, take some time at the start/end of each month to keep a rigorous check on your monthly expenses. Review every expenditure and try to root out the ones that donâ€™t positively affect your business growth. Because as a solopreneur, your businessâ€™s growth is all that matters in terms of being financially secure and successful.
This way, youâ€™ll slowly but surely streamline your expenses and increase your disposable income which can be invested back in growing your business ? learning more skills, attending networking events, optimizing your website and online presence, and so on. Also, ensure you have an emergency fund aside for times of crisis. And if worst comes to worst, you can always borrow some instant cash from credible short-term payday loan providers like Peachy or Speedy Cash.
What tips do you have on cutting costs and increasing profitability as a one-man army? Do share your ways to cut costs in a small business in the comments below!