Smart Cost-Cutting Strategies for Sole Traders
- 30 Aug 2022
If you’re operating as a sole trader, you’ll know that times are about to get a little tougher. You need to continue earning during the economic crisis hitting the UK, and you also want to up your rates to match inflation, so that you have the same purchasing power as you did before the start of the inflation crisis. All of this means finding smart ways to keep yourself solvent and to keep earning throughout the coming year – and this article offers some tips on how to do just that.
The last thing you want to do as a sole trader is to feel that you’re ripping off your customers and clients – especially as you may well be serving a local area in which trust, and word-of-mouth introductions are so important. Yet, at the same time, you cannot continue to charge the same rates as you did in 2020, when the cost of basic products has risen so much since then. Finding the right balance is important and will often come down to adjustments on your hourly rate as well as adjustments that take account of the higher fuel and materials costs that you’re shouldering.
Speaking of fuel, if you’re driving from house to house to do your work it’s certainly a good idea to find yourself a favourable fuel card. You can compare fuel cards online to find the best match for you. They’re offered by all the major petrol stations and can secure you price reductions and VAT cuts as well as give you a simple way to track your fuel spending, which you can take into account when you’re adjusting your prices.
In the good times, when you’re earning good money and the future looks bright, you’ll often think about investing some cash into your business. You’ll buy new tools and equipment, you’ll tune or upgrade your vehicle, and you’ll think about building out your online marketing and website. However, in difficult times, these amount to extra costs that it might be unwise to engage in. Instead, think about where you’re generating the most cash as a sole trader, and focus relentlessly on that. Leave the frills and extras for the future, when the inflation crisis will be over, and you’ll be better able to invest with confidence in your business.
With the government looking into ways that they can help both consumers and businesses through difficult economic times, you must keep track of the assistance that you might be entitled to as a sole trader. This might include a payout for you to cover your bills or tax breaks that’ll help you to keep turning a profit. If you’re in any doubt about what kind of incentives and breaks you might be entitled to, you should find a citizens’ advice centre, or speak to an expert who can help you get to grips with these policies.
Sole traders are in for a rough ride in the months to come, but these strategies can help you to continue turning a profit and keep your business afloat.