“Starting a business is the freedom to do what you choose and be your own boss.”
Have you heard this before? I have, and there is some truth to it. Don’t get me wrong. If I don’t enjoy working with someone, I don’t have to continue to do so.
But if we stop and take off the rose coloured glasses, it’s also the pressure to provide an income to contribute towards my household, which can feel completely overwhelming at times. Especially when you are first starting out.
Here are some things to consider when starting out to take some financial pressure off what people in the financial technology world refer to as cashflow:
For all you service based businesses out there: If it is work you’ll be performing where you understand exactly how much work it will be in advance, consider charging a fixed monthly fee and getting paid on the first day of the month for work that will be completed that month. Or if it isn’t monthly, do it by the project. Don’t be shy to ask to get paid before you start work. If you are really nervous, split it in two. Half now, half before the final piece gets turned over. You might be okay without the funds upfront now, but this could help you with the ability to scale up your business if you feel you want to later. It also gives you the opportunity to choose to not perform the work if they don’t pay you on time. Move past the discomfort to better support yourself.
Get your books up to date and keep them that way. Some of you reading this already have done this and if so. Great job! Ignore this point and move on to the next. If this isn’t already sorted, odds are that maybe it feels like a pain to do? That means you’ve got the wrong system setup for you. There has been leaps and bounds in technology in the fin-tech sector (financial technology). Use it. If you are able to take a picture with your phone and email it, there is technology that can make your life easier. Have a conversation about this with someone who can help you with that transition. Maybe it’s us, maybe it’s someone else you already have a relationship with. I don’t care who it is. Just do it! You’ll thank me later.
Last but not least, get your books setup in a way that when the invoice goes out, the money can be paid automatically! Yes, this is a real thing and not some fantasy unicorn I’m promising. There are several different ways to do this depending on your accounting software and your preferred fee structure. Also, it doesn’t always cost a ton of fees. Some of the cooler ways with more automation and bells and whistles does cost more, but there are options for the lower budget market too. If you are sitting there giving me side-eye, please know this. I wouldn’t say it if it weren’t true. You and I both know, you don’t want to be sitting there waiting for a cheque to come in. You want better control of when you’ll have the funds available to pay your expenses and yourself. Just like the point above, this is an important thing to consider having in place to make it easier to grow if you choose to.
Now keep in mind, this isn’t a complete list, but hopefully there is something there you can take away and do. Why didn't I do a complete list, well... A) I don’t want to overwhelm you with every possible scenario; and B) “Ain’t nobody got time for that!” I don’t think anyone other than the most determined would have the patience to read through the entire list of scenarios.
If you are interested in hearing more on this topic, let us know! If you found this useful, share it with your friends that have or are starting a business.