Friday, February 17, 2012

Controlling What Comes In vs. What Goes Out

Let’s face it, unless you’ve just written a best seller and have sold the movie rights to it, you won’t make a whole lot freelancing. That’s the truth and there’s no getting away from it. So to maximize your profits, you have to control your expenses—and not just your business expenses.

To set up a good system to control your overhead, you should take a look at how other small business do it. The first, and most important, thing to do is to keep careful records of what you spend on every item and review the figures regularly. Keep an eye out for bargains and buy in bulk at a discount when you can. Use credit wisely—but don’t become dependent on it. Create a budget and stick to it. And lastly, update your equipment when you can afford to. In other words, put some money back into your business.

You'll want to measure your success against the cost of it to see where you can cut corners and still maintain your needed writing routine. While the latest and greatest computer and phone equipment might be nice and will impress your friends, neither is necessary to conduct your freelance business. In fact, you may not want to buy the latest computer with the latest operating system.

For example, let’s say you have some programs that you know how to use well. It’s likely that if you upgrade to the latest Windows, for instance, those programs will no longer work on your system. You’ll have to go out and buy new ones or new versions of the old ones and that takes money. Plus, you’ll have to take the time to learn the new programs and that takes time and time is money. The same applies to your phone. If you have to have a cell phone, then consider a prepay plan like Tracfone that will enable to you to keep your costs in line and not give you another bill to pay every month.

How you handle the basic, materials of your trade is a matter too important to ignore. However the thought process may begin, you’ll soon find yourself composing and refining your thoughts on paper. Perhaps you’ll begin in longhand on a legal pad. Or maybe you’ll go directly to your computer and compose on the screen. Keep an eye on how you use paper. Do you really have to use fresh sheets for your notes? Why not print out your notes on the used pieces of paper? Likewise, do you need to buy special note pads or can you employ the backs of used envelopes to jot down memos or to-do lists? This may sound frugal, but it does save money. And while you’re at it, why not reuse those large envelopes in which you get other mail. Of course, in all cases, the envelopes shouldn’t have more than an address and return address on them, both of which you can cover over with labels and new addresses. To reseal them, buy some clear shipping tape.

You'll be dollars ahead if you study religiously every tip that comes your way regarding items you can get for less or, better still, for free. Know what you need and be on the lookout for sales. For example, you know you’ll need to buy additional print cartridges for your printer, so why not buy them from a discount house like LD Products and take advantage of their occasional sales and free shipping on weekends.

When you need office supplies, don’t make a beeline for your nearest Staples or Office Max. Instead, check online first and keep an eye peeled for sales of printing paper at your local supermarket when school begins in September and at drug retailers like Walgreens.

Today, you don’t even have to buy books new. There are plenty of places to buy used copies, both online and at book sales. And don’t forget that you can still borrow them from your local library, and they won’t cost you a dime unless you return them late.

Look at each item on your budget, including food and utilities, and examine alternatives. Can you use another service, such as UPS, in place of the U.S. Mail and save money? You don’t have to spend hours clipping coupons to get bargains.

Also, consider how you do your research. Technology in general has enabled people to spend far less for communications. Not so long ago, you would have had to pay hefty long-distance charges to interview someone across country—and even worse, within your state. Today, most phone companies, both cell and land line services, offer package plans that include long distance—one amount for all services per month. While before you would have had to keep a phone log of each call, today you needn’t worry about it. Instead, you can deduct a portion of your phone bill for your business.

You can even conduct interviews or get the information you need by E-mail. An advantage to using E-mail is it enables you to send the questions you want to ask ahead, so that your interviewee can prepare, resulting in a more productive interview. It also enables those who speak English as a second language to get an assistant to send you the answers to your questions in clear English, so there will be no misunderstandings.

Finally, you’ll need to record your expenses so you can interpret them as you go. There are a number of programs that allow you to do this. Try to find one that will let you record each expense right after you pay for it, then will let you compile all your expenses for tax purposes.  Splash Money from is one such program that works with smartphones, tablets, laptop and desktop computers.

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