10 Strategies to Minimize Home-Based Business Expenses

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10 Strategies to Minimize Home-Based Business Expenses

Apr 02, 2024

If you’re a small business owner, you might spend a good chunk of time working from home — according to a recent study from the U.S. Bureau of Labor Statistics, more than 20% of workers teleworked or worked from home at some point in February 2024. With the rise of remote work and entrepreneurship, more people are establishing home-based businesses to pursue their passions and generate income, but operating a business from home comes with costs. Here are 10 practical tips for minimizing your home-based business expenses.

1. Make a budget

Just as you maintain a household budget for your personal finances, you’ll want to make a spending plan for your business. That depends on two key factors: your business income and expenses. Common work-from-home expenses include:

  • Utilities

  • Phone and internet service 

  • Office supplies

  • Wages you pay to anyone who works for you, whether those are W-2 employees or contract workers

  • Fees for business services (software, membership fees, etc.)

  • Transportation for work-related meetings and events

If your expenses outweigh your earnings, you’ll need to cut costs or find ways to increase revenue — or both.

2. Maximize tax deductions

Self-employed folks who work from home may be eligible for certain tax breaks. Tax deductions reduce your taxable income, which could bring down your tax liability. Here are some small business tax deductions to consider:

  • Home office deduction

  • Home office repair and maintenance

  • Utilities, internet and phone

  • Startup costs like registering your business and purchasing inventory

  • Licenses and taxes

  • Business and office supplies

  • Business software and equipment

  • Website costs

  • Cleaning services

  • Business meals and entertainment

A tax professional can help you determine which tax deductions are right for you (and ensure that you’re claiming them correctly).

3. Use technology to your advantage

You can’t do everything on your own, especially if you’re a one-person operation. Investing in the right business software can help you save money in the long run. It can also automate certain tasks, freeing up more time for you to spend on managing and growing your business. You can explore technology solutions for the following: 

  • Payroll 

  • Taxes

  • Payment processing 

  • Inventory management 

  • Budgeting

  • HR tasks

4. Look for discounts for business owners

Check to see if your phone or internet providers offer special plans for business owners. It could help curb your work-from-home spending and provide better services to meet your needs. If you don’t already have a business bank account, shop around to see if any banks or credit unions are offering sign-up bonuses for new account holders. Even if you have accounts, switching could be worthwhile. 

5. Trade services with other entrepreneurs 

Another way to save is to barter with other entrepreneurs and small business owners. Let’s say you’re a work-from-home marketing consultant who knows a tax professional. You might offer to create web content for them in exchange for discounted tax services. Think about what your needs are, and then reach out to people in your network. Other business owners may be open to collaborating — and saving money.

6. Review your ongoing business expenses

It’s good practice to periodically review your recurring business expenses. That includes your insurance policies, cell phone plan, internet package and other ongoing costs. You could minimize your costs by comparing other providers and shopping around for better rates. Your existing carriers may even drop their prices to keep your business. 

7. Lean on your network

No matter your industry, it’s good to be connected to colleagues and other people in your field. Being part of a Facebook group, for example, is a simple way to stay on top of industry news, network, get new leads and share resources. You can also pose questions to the group and help each other when it comes to setting competitive prices. If you don’t already belong to a professional organization, consider joining one. Sponsored events can get you out of the house and lead to new work.

8. Don’t skimp on marketing

Marketing is easy to neglect, especially if you work from home and money is tight, but not doing it could cost you future business. The goal is to build a lasting relationship with existing and prospective customers. The U.S. Small Business Administration suggests making a marketing plan that includes your: 

  • Target audience

  • Competitive advantage

  • Sales plan

  • Marketing and sales goals

  • Marketing action plan

  • Budget 

9. Get creative with child care

If you have children, working from home goes hand in hand with child care costs. School breaks, like summer vacation, can be particularly challenging. Child care isn’t cheap, but one workaround is to team up with other work-from-home parents. You can offer to keep their kids at your house for one week, which could keep your children entertained while you work. The next week, they can all go to the other person’s house, leaving you with a quiet workspace.

10. Refinance your business debt

If you’ve taken out loans to fund your business, you may have high-interest balances. These accounts could cost you a lot of money over time. One solution is to refinance your business debt. This involves taking out a new loan, then using that to pay off your outstanding balances. You’ll then have one new balance and due date — and hopefully a lower interest rate. That could create some breathing room in your business budget.

Meet The Author:

Maxime Croll

Maxime Croll

Maxime is a Sr. Director at LendingTree focusing on the insurance industry. Previously she was the Director of Product Marketing at CoverWallet, a commercial insurance startup, and helped launch NerdWallet's personal insurance business. Maxime has contributed insurance and business insights to Forbes, USA Today, The Hill, and many other publications.


The opinions expressed in our published works are those of the author(s) and do not necessarily reflect the opinions of the National Association for the Self-Employed or its members.

Courtesy of NASE.org