Costs can actually increase as a result of you working from home
When you decide to start a business from home you’ll discover that it can work out a lot cheaper than many tradition nine-to-five jobs, in many respects at least. You won’t have to worry about paying for a commute twice a day, five times a week. You won’t feel pressured into buying an overpriced sandwich for lunch each day and you won’t have to purchase formal clothes to ensure you look professional.
It is worth considering, however, how some other costs will actually increase as a result of you working from home. Only by considering both the advantages and disadvantages of working from home can you come up with an accurate budget going forward.
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Technology
Back when you worked as a full-time employee, if your computer broke or your office chair was causing you back problems, you simply spoke to management and requested a replacement. These are the kinds of expenses that business have to plan for, but when you start working from home they become your responsibility instead.
As a freelancer, technology will likely prove vital for your business. Your laptop may be your main day-to-day work tool and without it, there’s little that you can do. In order to keep your technology costs down as a sole trader, remember that any work equipment you buy can be counted as a business expense and will help reduce your self-employment tax bill at the end of the year. Make sure you keep hold of any receipts you receive and submit them at the end of the financial year.
If it’s software that you are relying on, make sure you look into cloud software-as-as-service (SaaS). This will involve subscription costs rather than an outright purchase, so weigh up which one makes the most financial sense for you before committing.
Utilities
For businesses based at home, you may also find that you will be using your telephone a lot more to speak to clients and customers. If this is the case, make sure you use utility comparison sites like comparebundles.com to see which packages are right for you. You may find that by switching to a home VoIP system for your business calls you can save significant sums.
If you’re working from home, it also means that your utility bills are inevitably going to increase. Once again, you can claim back a portion of your utility bills as a tax-deductible expense, but also be extra careful to conserve energy where you can – instead of turning that thermostat up, could you put on another layer instead?
Travel
Just because you work from home doesn’t mean you won’t still be travelling as part of your job. Meetings and networking will require you to leave the home and will contribute additional costs. To keep these down, try to book tickets as far in advance as possible or agree for your client to cover them. Also, if you’re travelling a lot in a particular time period, investigate whether a monthly ticket might be more economical. A bit of extra research can certainly go a long way when it comes to reducing the costs of working from home.
