Carly Ries
Let me preface this post by saying I am not a financial advisor or CPA. What I am, however, is a solopreneur with years of experience who has had to figure out the money side of things on my own.
In reminiscing about my trials, errors, and successes, I jotted down a list of things I think would be important for solopreneurs to know so that they can properly budget and embrace financial planning.
Here are some tips to save money as a solopreneur that I wish I would have known when I was starting out (and still actively keep in mind to this day).
My Top Tips to Save Money As a Solopreneur
1. Validate Your Idea
I have ideas all the time. Whether they’re good or not is always the question. Before you spend too much time and money on your product or service, make sure it’s something worth pursuing and has ground to stand on.
Talk to people from your target audience and gather their thoughts.
Do your research and see if there is anything similar on the market that is doing well that you can improve.
Another way to test your idea is to create a landing page with your business offer, drive ads to it and see if you generate any leads. This can be an inexpensive way to learn something quickly.
I’ve seen a lot of solopreneurs waste their money and resources on a business that wasn’t going to go anywhere. Do your homework ahead of time.
2. Create A Budget
Not exactly the most groundbreaking advice for a money-saving article, I know, but you would be amazed at the number of solopreneurs that don’t do this. I’ve seen many who have a budget in their personal lives, yet neglect it professionally.
It’s easier to stick to a budget when you have a business with employees because you really need to be accountable for where your money goes.
As a solopreneur, however, since you only answer to yourself, it’s easy to go outside the budget, but that can be a slippery slope.
If you have a hard time with this, I’ve heard great things about YNAB, an app that helps you “gain total control of your money.” They have a free trial and it’s only $99/year.
There are tons of other tools as well, that’s just the one I’ve heard the most praise about.
3. Separate Your Personal and Business Finances
This can be so hard to do as a solopreneur. Everything just kind of seems to blend together most days, which can make it easy to lose track of what you’re spending within your business. Plus, if you don’t do this, it can be a nightmare during tax season.
I knew a person who would go through their personal credit card statements during tax season to find her business expenses and would highlight them to separate them from her normal personal spending. What a nightmare. It took her forever.
Not worth it. Moral of the story? Be sure to create a separate bank account, credit card, etc. During tax season especially, you’ll thank me for this little nugget of wisdom.
4. Track Your Expenses Carefully
To piggyback off that last section, track your expenses very carefully throughout the year. It may even make sense for you to hire a bookkeeper.
If you do this, however, don’t be totally hands-off. As a small business owner, you need to have a firm grasp on what’s going in and coming out. You also know the day-to-day operations and can catch any errors that a bookkeeper may not be able to.
One way to track expenses is to digitize your receipts to keep them all in one place. If you use Quickbooks for your accounting, they have this feature. There are also a plethora of one-off apps that help you scan and store them in one place.
I highly recommend it!
5. Consider a Retainer Structure to Keep Income Consistent
This won’t apply to all businesses, but if you offer services to clients, consider structuring your payment set up as monthly retainers. This can help you plan ahead for the year and can ensure you have a steady income in slower months. The hours spent typically come out in the wash during your busier months.
You must plan for the income ups and downs of this lifestyle, and a retainer model is a great way to do that.
6. Make Financial Planning a Priority
Save for Retirement
While leaving your 9-5 certainly has its perks, there is one downside you can’t always ignore: the benefits. Healthcare and retirement savings suddenly become a lot more complicated when you’re flying solo but you need to put money aside for them. Your future self will thank you.
Invest In Doing Taxes The Right Way
As you go down the road of solopreneurship, you’ll realize there are some things you’re really good at, and other areas that can use improvement. For me, that was taxes, so I knew from the beginning that it would be wise to work with a pro.
Best.Investment.Ever.
And yes, I say investment, not expense, because I have actually saved money by working with a CPA. Not only did she hold my hand during tax season and educate me on quarterly payments (which you should look into as a solopreneur), but she pointed out areas where I could save.
Hello, expenses and write-offs.
As a business owner, you can write off business-related expenses, such as:
- Your cell phone
- Education
- Travel
- Home office
- Software
And more. Ask yourself if an expense is related to your business, and how. Speak with a professional about this to see how you can make it work for you.
Related Podcast Episodes:
- Financial Planning Dos and Don’ts for Solopreneurs
- How to Prepare for the Unexpected and Master Your Finances
7. Focus on Professional Development - For Free (Or Almost Free)
As a solopreneur, I feel like I’m constantly learning. There’s always some aspect of my business that I need to better understand. In addition to joining communities like The Solopreneur Community, my head can often be found in books or online tutorials. But want to know a secret? I don’t pay for any of it.
For books and audiobooks, I highly recommend Libby. It’s essentially an online library where you can put content on hold and check them out for free. All you need is a library card!
Coursera and Class Central are great places to take classes from top universities online...for free. Yep, I said it.
LinkedIn Learning isn’t free after the first month, but it’s only $20/month for solopreneurs and has incredible content to check out.
Then, of course, there’s always your trusted friend Google who's there with answers to your most pressing questions. Just be sure that the content you’re consuming is from a credible source.
Aside from professional development, there are just a ton of free apps, across different categories, that you can use to help your business grow. So, depending on your business needs, be sure to do your research and see what you can use for free or at least below your budget.
8. Partner Up
I just wrote an entire article that addresses strategic partnerships for solopreneurs. Instead of copying and pasting here, I suggest you give it a read.
Essentially, by forming strategic partnerships, you can share the cost of certain things with other businesses and reach each other's audiences without starting from scratch. It’s a win-win for both companies involved.
9. Focus on Low-Cost Marketing Efforts
As a marketer myself, I’ve put in a lot of time to find-low cost ways to get the results I’m looking for for my campaigns. There are a ton of free and low-cost tools you can use to build your website, create marketing materials, communicate with customers, etc. Plus, there’s no denying social media can be a significant wait to reach and understand your audience, and it’s all free. The key is to select the correct platform for your business.
Below are some of my favorite low-cost/free tools to look into for your marketing efforts:
- Unsplash - free photos
- Canva - free design tool (super easy to use even if you’re not a designer)
- Answer The Public - free tool to help you understand your audience’s intent
- Google Analytics - free tool to help you monitor your marketing effort
- Buffer - a free version that helps you schedule and plan your social media
- HubSpot CRM - a free version to manage your customer relationships
10. Consider Bartering
If you’re on a tight budget, consider exchanging services for services with another business. For example, if you can help a web developer with your services, maybe that person can build your website for free if you give them your product or service for free. But remember, you may need to report these transactions on your tax return. Check with that pro we talked about.
Something to think about!
11. Identify Ways to Save Time
There’s a reason the phrase “time is money” exists. The more time you save, the more money you save as well.
One of the best ways to do this is to keep track of your time for a week and see how much fluff you have that you could spend in a more productive way.
Another tip? Avoid multitasking. It’s not the time-saver you think it is.
One way to save time is to follow a concrete plan to succeed as a solopreneur. Be sure to check out The Solopreneur Success Cycle to help guide the way!
12. Productize Your Offerings
As a follow-up to the section above, try to think of ways to not always trade time for money. You could productize your services and make a paid course. Host a paid event for your audience. Write and publish a book.
The sky’s the limit!
13. Make Your Own Coffee
I know this sounds so ridiculous, but honestly, this was one of my biggest money-savers when I first started working on my own. Since I didn’t have an office to report to, I often found myself going to coffee shops to get in the zone. I do love the atmosphere for productivity, but those lattes add up! Make your cafe visits a treat and don’t make them habitual.
Those are my top tips! What are some ways you’ve saved money in your business? We’d love to hear them!
Like getting the inside scoop on how to be a successful solopreneur? Join our free community of solopreneurs to learn a thing or two, get your questions answered, share knowledge with others, and build your network.
