Raise your hand if you’ve heard this one before…
“It takes money to make money.”
Does it though?
And what about us freelancers & contractors, who aren’t exactly rolling in $100k marketing budgets?
What business expenses help grow our revenues, and which don’t?
We asked a few experts to weigh in: what are some smart ways you can spend money–in order to make more money and grow your freelancing or content business?
These are the business expenses you probably shouldn’t hesitate to invest in. 👍
First, find your “profit centers.”
Before we start, you need to understand this first…
I view business tasks as falling into two buckets – cost centers or profit centers. A cost center is something you have to do as part of the business but doesn’t generate income for you, such as accounting. A profit center is something that you have to do as part of the business but it generates income. I try to expense or simplify the cost centers as much as possible so I can focus on the profit centers.Jim from Wallet Hacks
Once you understand which business expenses actually generate income in some way, you can use this as a coffee filter:
When looking at how you can/should spend money–run it through that filter and try to determine if it’s a necessary expense that’ll help you earn more.
1. Accounting & Invoicing Software
You didn’t expect AND.CO to leave this one out, right?
Elizabeth Harrin from Totally Organised Blogging says this:
Accounting software – definitely! I used to have a spreadsheet, and reconciled the expenses and income manually. It used to take me a day a month. Even if you are just starting out, I highly recommend getting accounting software. I’ve saved so much time. So, if you are self-employed and just starting out with your business, invest in a tool that will grow with you, you’ll be grateful you did.
Let’s get our own pitch out of the way: Not only can you use AND.CO to track expenses & manage invoices, but you’ll also have access to time-tracking tools, proposal & contract templates, and way more.
If you’re a contractor of any kind, you’re going to need professional invoicing, contract, and accounting software–fo sho.
2. Part-time Help
No, you don’t have to scale up, hiring dozens of freelancers beneath you and working with dozens and dozens of clients.
This doesn’t have to be a massive business expense, you can start small.
DIY-ing all-the-things is a good way to spin your wheels and burn out fast. Do the things you excel at – and hire out the things you’re really not great at, or the things you hate doing.Carly from Mommy of Purpose
Here’s two more ideas for you to help keep this expense small:
- Reach out to local universities (their career centers!) and ask about hiring local interns. You might be able to hook a lucky college student up with additional credits, or at least affordable labor.
- Consider hiring a Filipino virtual assistant to take over small administrative tasks. As long as you approach the hiring process carefully (check for perfect English first and foremost), this could be an amazing way to free up your time while keeping costs low.
No need to go all “agency” on us, but freeing up your time to make more money is always a great plan. 😎
3. A powerful calendar app or to-do list app.
This expense may not directly make you money–but it could directly save you losing money.
One missed deadline could mean losing a client!
Even if you use Google or Apple calendars, there are still some cool apps out there that enhance those experiences to make sure you never miss a client’s deadline. Here’s a nice list from Zapier.
Or…you could buy a huge wall calendar!
4. Conferences and/or meetups
- Podcast editor? Go to podcasting conferences.
- Freelance writer? Go to conferences about your industry/niche.
- Consultant? Figure out which events your ideal clients go to, then book your flight.
This probably could’ve been #1 on our list of business expenses.
As long as you approach in-person events as a way to build relationships–spending money on conferences is almost always a win in the long-run.
Conferences have made a big difference in the way I run my business. I attend professional conferences for continuing education to maintain my credentials, and also to network with current and potential clients. The money spent on conferences has always returned more to me in the form of new paid projects.Kim from Frugal Engineers
Note: If you’re a new solopreneur, and a conference costs you $1,500 to attend, just know that you might not make that money back immediately. It could take months (or even years), but it will pay off!
5. Invest in headshots
Professional photography. Visual appeal makes all the difference.Alyce Jane
Ok, hear me out…
It might seem like a little thing, and perhaps not worth spending $100-400 on, but most of us are engaging with clients and customers via the internet, oftentimes via email and other faceless mediums.
A professional headshot in your email signature (or on your perfect portfolio website you’ve built) sends a clear message that you’re a pro.
And relatively speaking, it’s an incredibly high ROI business expense.
Find a local photographer whose work you approve of, let them do all the heavy lifting, and you can use those headshots for years to come.
6. Your health
Self employed people should definitely invest in their health. Keep yourself healthy by eating well, staying active, and managing stress. There is no sick pay when you work for yourself, plus it’s the one thing (besides time) you can’t buy back when you’re wealthy, so don’t take it for granted!Bri from Frugal Minimalist Kitchen
Ok, if you’re totally rolling your eyes at this one, I couldn’t blame you.
But we’re self-employed. Hustlers. Our own boss. Our own schedules.
If we take time, we don’t get paid, yes? So we should work around the clock and eat junk food?
Take a quarterly spa day. Take vacations. Buy healthy foods.
Work on your gym’s wifi if it means going to the gym more often.
Pro Tip: make sure to track all these business expenses for tax time! Here’s a handy list of other commonly missed tax write-offs and deductions for folks like us.
7. Your workspace
Invest in your working space! Pay the monthly membership at a coworking space. Buy that cup of coffee to get a seat in the coffee shop. Or set up a home office with a dedicated workspace. Find the environment that works best for you and your productivity and make the investments so it is somewhere you can be comfortable and productive from the moment you sit down.
After sitting at the kitchen table for a few months I realized the importance of proper ergonomics and mindset as my arms were hurting and I found my mind constantly wandering as other family members would come and go. I think it is critical to stay in a healthy, working mindset if you want to find success in self-employment.Derek from The Money Family
If you can’t work and be productive, you don’t make money.
It might take some “figuring out,” but if your A+ productive workspace requires a bit of cash, don’t hesitate to invest in this.
8. A non-crappy computer
This might sound obvious to some, but too many people try to cut costs on this one.
No productivity hack in the world will make up for a slow laptop.
Invest in a decent machine and keep it running well!
9. Your education
Education is the best thing to invest in when you’re self-employed. Without a solid foundation of knowledge of your industry and your business model, you won’t know what else is worth investing in and run the risk of wasting your money and time.Nerissa from Homebody Hall
Oh hey! You’re already one step ahead on this one reading the AND.CO blog! 😉
The gig economy and digital marketing are ever-expanding fields, and it’s vital we stay on top of our craft!
(and how to continually market and sell our craft).
Aside from educating yourself on your actual service/product/craft–we also recommend doubling down on sales, copywriting, and marketing resources.
These will help you get more clients regardless of niche.
Takeaway: Start small with the business expenses!
After all these tips, it’s incredibly important to stay focused on the bigger picture here: growing your freelance or solopreneur business.
I always advise people to start small with their business expenses… all the tools in the world won’t make you successful if you aren’t focused on the single most important part of your business: making money. Invest in things that will help you focus and keep organized.Jake from Money by Jake
Keep your business expenses tight, making sure these investments are always adding value and leveraging your time!
What about you?
Did we miss any key expenses? Drop us a comment below with your thoughts!