Every freelancer has a few unavoidable expenses, but when do you know whether your business spending is an investment or a waste?
You have to spend money to make money, right? Perhaps not. Sometimes that’s an excuse to justify a purchase as an “investment” when it isn’t one.
I’ve been on both sides of the fence. As a penny-pinching freelancer, I probably should have invested money into my business earlier. I’ve also wasted money on flashy tools and services that seemed helpful in theory, but actually weren’t in practice.
After reviewing my business expenses for 2016, I asked fellow freelancers to chime in: What’s a worthwhile investment and what’s something you regret buying? A few themes emerged.
Attract Clients with a Professional Presentation
You can’t be a successful freelancer if you don’t have work. Maresa Friedman, a strategy consultant who goes by The Executive Cat Herder, lists building her website and hiring a company to help it rank higher in search engine results as two of her most worthwhile investments. She uses her site to demonstrate her value and attract clients.
Friedman isn’t alone in regarding a website as a must-have resource. Between monthly subscription plans with drag-and-drop website builders to purchasing hosting and building a site on your own, there’s an option for almost every budget. There are even free ad-supported platforms available. A LinkedIn profile is a good place to start while working on your website.
Offline, business cards are still an important branding tool. I’ve paid a little more for high-quality cards, and leave the back blank so I can write a note before handing my card to someone.
Purchasing several professional outfits, perhaps even a signature piece, are good investments if you frequently make presentations, meet with clients, appear on television, or attend conferences.
Improve Your Work and Productivity
With a few projects under your belt, you might be seeking ways to scale your business or increase your productivity. Be careful, warns Angie Meeker. A full-time freelance WordPress developer and host of the Freelancers’ Conference, she says, “It’s very easy for freelancers to get wrapped up in the tools they need to produce their work”—often at the expense of actually doing their work.
That’s not to say a new tool can’t help your business, but try to limit your purchases to products that improve your work or increase your productivity. For example, I pay about $105 a year for an Internet browser and a Microsoft Word plug-in that’s like a spell checker on steroids. It helps me polish articles before submitting them and saves me time on subsequent drafts. I also use free to track my time and help me stay focused.
As many freelancers know, your productivity can vary depending on your work environment. Paying for office space seems to be a popular debate without a clear resolution. Some freelancers, myself included, enjoy having a separate space outside their home to focus on work. As I like to joke, it’s hard for me to work at home when the refrigerator is always calling my name. But if you don’t mind working from home, and are productive doing so, certainly save your money.
Increased productivity lets you take on more work and is one way to expand your business. Offering higher-priced services is another way to make more money with your limited time.
Continue Your Education, Expand Your Offering
Advice to “invest in yourself” may be cliché, but that doesn’t mean it isn’t true. I’ve found inexpensive ways to continue my education, including free online classes and used books on writing. These help me produce accurate work more quickly and let me offer new services to clients.
Certification programs are another way to continue your education and distinguish yourself from the competition. Membership in professional associations could also give you credibility and help you meet potential clients and other freelancers in your industry.
Build Your Professional Network
A strong professional network can be a year-round source of referrals, but it can take time to build. In spite of the cost of tickets, travel, and time away, a conference could be a way to fast-track the process. Emails and phone calls simply can’t replace the connections you can form with a face-to-face meeting.
Zina Kumok, a fellow freelance writer, attributes her ability to leave a “regular” job to the connections she made at a conference. Kumok conducted an experiment last year and attended five conferences to see if the upfront investment could save her time and energy marketing herself to new clients. “Going to that many might have been overkill,” admits Kumok. “But I learned a lot and am better able to evaluate what’s worth it and not.”
What’s Your Bottom Line?
Spending money on your business can help it flourish. But that doesn’t mean you should give yourself a free pass to spend without thought. Ask yourself if the money you spend will improve your work, help you attract or retain clients, save you money, or save you time (if you need the extra time). If not, perhaps it’s better to put your wallet back and get to work.
Louis DeNicola is a freelance personal finance writer
who specializes in credit, debt, and practical money-saving tips.
In addition to being a Grownup, you can find his work on Credit Karma,
MSN Money, Cheapism, Business Insider, and Magnify Money.
Any third-party resources or websites referenced above are not under Society of Grownups control. Society of Grownups cannot guarantee and are not responsible for the accuracy of the resources, websites, or any products or services available through such resources or websites.
While Society of Grownups hopes the information is useful, it’s only intended to provide general education. It’s not legal, tax, or investment advice, and may not apply or be useful to your specific financial situation. All investing has risk, including the possible loss of assets. If you need recommendations geared to your personal financial situation, schedule time with a financial planner.