With a sole proprietorship (solopreneur) company, you may not have employee wages to worry about but you still need to maximize your profit in order to pay yourself and grow your business. Earning more money is the name of the game, however saving money can oftentimes be the easier way to increase profit. For our second installment of our Women Entrepreneur Tips series, we present five ways solopreneurs can save money.
1. Be sure to claim all of your eligible business expenses, including portions of expenses you share with personal use, when filing your business taxes. Here is the CRA’s list of expenses:
- Advertising (Line 8521)
- Allowance on eligible capital property (Line 9935)
- Bad debts (Line 8590)
- Business start-up costs
- Business tax, fees, licences, dues, memberships, and subscriptions (Line 8760)
- Business-use-of-home expenses (Line 9945)
- Capital cost allowance (Line 9936)
- Current or capital expenses
- Delivery, freight, and express (Line 9275)
- Fuel costs (except for motor vehicles) (Line 9224)
- Insurance (Line 8690)
- Interest (Line 8710)
- Legal, accounting, and other professional fees (Line 8860)
- Maintenance and repairs (Line 8960)
- Management and administration fees (Line 8871)
- Meals and entertainment (allowable part only) (Line 8523)
- Motor vehicle expenses
- Office expenses (Line 8810)
- Prepaid expenses
- Property taxes (Line 9180)
- Rent (Line 8910)
- Salaries, wages, and benefits (including employer’s contributions) (Line 9060)
- Supplies (Line 8811)
- Telephone and utilities (Line 9220)
- Travel (Line 9200)
- Other expenses (Line 9270)
You cannot deduct expenses for obtaining capital gains, but you can deduct expenses incurred to earn business income. Hire an accountant to assist you with tracking and claiming all of your expense deductions. This will allow your more time to focus on your business, and decrease your business taxes, so it’s well worth the cost of outsourcing this task.
2. Create a budget for your business and track your spending in each category diligently. Any of your expenses listed above should be planned for, budgeted and tracked. This will prevent spending from getting out of hand and costing your business its profits.
3. Decrease lunch meetings and coffee meetings. The cost of the food, drinks and tips quickly add up from regular lunch and coffee meetings, so instead try to schedule meetings at your office, or virtual meetings via Skype, etc that doesn’t involve the added costs.
4. Barter your products or services for other products and services. Business to business transactions are a part of any business even when you are serving the end consumer, so why not try to save some money by exchanging what you to have to offer for what you need? It can be a win-win for both parties, so think about this the next time you are seeking new products or services for running your business. It doesn’t hurt to ask.
5. Join a community, or make connections with, similar entrepreneurs (possibly who aren’t your direct competitors due to location) and share your knowledge. Online sources for supplies, warnings about poor choices in supplies or services, tips about what works and what doesn’t… the sharing of information between like-minded business owners is invaluable for saving money, avoiding mistakes, and not feeling alone. You may want to consider joining a group like the Solopreneur Life Style Network – http://www.solopreneurlifestyle.com
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