As you know the ultimate goal of a business is to keep improving revenues, you can do it by reducing your cost too. The pandemic era is not over yet and the economy is still facing doom. There is still no clarity on when the situation will get back to normalcy and how soon you will bounce back.
Some of the companies are struggling to pay salaries to their employees and making them redundant and it is not surprising to hear that the unemployment rate has gone up. Well, if you have just started your new business, you can get as many people for the openings in your company, but it is suggested to be on the safer side because you never know if you will make it or break it.
Like other companies, you can also struggle to pay your employees and that is quite evident in start-ups because you still have a long way to go to the breakeven point and hence you should try to hire freelancers.
They often seem to be more expensive than full-time employees as they are paid on a project basis, but you do not consider other costs associated with hiring full-time employees. Here is how hiring freelancers can be an ideal choice for your business until you reach the breakeven point.
It whittles down energy bills
When you hire full-time employees, you need to rent an office. In addition to the rental, you will have to bear the energy cost due to lights, fans, air conditioners, and blowers. This can drastically increase your energy bills.
When you have just started your business, you cannot afford such high bills. If you hire freelancers, you can avoid footing such bills. Since everybody will be working remotely, you do not need to worry about energy bills.
As far as it is about the energy cost that you will likely bear by working from home, there are various alternatives to keep it low. You can switch to another energy supplier that is more affordable than the current one and use energy-efficient appliances.
Of course, you will need some tools to establish proper communication with your staff and clients. When you assign a project to your staff, you may need to explain to them how they have to complete it.
You can use tools like Skype that can allow you to connect with your employees through a phone call as well as video call. You can also share the screen to instruct them how something is to be done. One of the best advantages of hiring freelancers is you do not have to keep tabs on their productive hours.
You just have to set the deadline and assure that they meet that deadline. If they fail to do that constantly, you can replace them with someone else. Tracking software can be expensive and you may not be able to pay for them during the beginning years of your business.
Likewise, you do not have to meet your client every time to discuss things that you can do over such platforms.
Cut office cost
It is not recommended that you should not look for the location of your business. Of course, you will have to find the one to get registered for your business, but you may not need it necessarily if you can run your business from your home because in that case, you can get all your parcels delivered over there.
You can change the location anytime down the road when you see your business is doing well. Until you reach your breakeven point, you should try to operate your business from your house. This can prevent you from bearing the rental cost of the office building.
Further, you do not have to go every day to the workplace to save your fuel charges. Once you start making more revenues than the operation overheads, you can think of moving out to an office location and hire full-time employees.
You pay per project
Although you think that paying per project costs you more than the salaries of full-time workers, you fail to take into account the opportunity cost. For instance, full-time employees are not as productive as freelancers even if you keep tracking every minute.
Freelancers quickly finish their projects because they know they are not bound to be on the clock for fixed hours like full-time employees. This is a big reason they meet deadlines and make most of every minute they spend on a project.
However, this is not the case with salaried people. They can rest on their laurels especially if their jobs are secure. Freelancers grab multiple projects from multiple clients so they make all possible ways to keep them appeased.
Use cheap alternatives for meetings
When you hire freelancers, it does not mean that you do not need to meet them up. Although there are various online alternatives to discuss projects, there are several things that you will have to do face-to-face.
To do a meeting, you do not need an office-like space. You can conduct it at a restaurant or cafeteria. Once your meeting is over, you can enjoy snacks.
Hiring freelancers can undoubtedly help you save costs. This is because you can get the project done on strict deadlines without paying any additional benefits that you offer to full-time workers and incurring additional costs like office rent, performance trackers, and the like.
Until you reach your breakeven point, you should hire freelancers instead of full-time employees. You should save as much money as possible in the beginning years because most of the start-ups are funded. Even if it is a small loan like online loans in Ireland, you should manage your money smartly.