NOVEMBER/DECEMBER 2019 VOLUME 3, ISSUE 8
T O P H ’ S TAX RESOLUT ION T I M E S
Strategies to Even Out the ‘Cash Flow Roller Coaster’ FEAST OR FAMINE
When you’re a self-employed business owner, there are some months when you look at your bank account and worry. Then, there are other months when you breathe a huge sigh of relief. It comes back to the idea of the “cash flow roller coaster”— that period of time when your cash flow varies from month to month. There is a constant shift between feast and famine. The most obvious way to protect yourself when you’re dealing with financial challenges is to cut your expenses. Many people will try to save some money by cooking more meals at home versus dining out. And some may even try to use public transportation to save on gas money. But what are you supposed to do when you literally can’t cut your expenses any more than you already have? The answer is so simple, but it takes a total shift of mindset to accomplish. Rather than focusing on reducing your expenses, you need to focus on increasing your income. I don’t typically like cliches, but this is a classic example of needing to have a glass-half-full rather than a glass-half-empty mentality. This is not easy to do, and it took me a long time to come to this realization. One of the great things about being self-employed is that you control your own destiny and your own ability to earn income. So, how does a self- employed person increase their income without increasing their spending? One way to do this is to get involved in your local community and meet some new people. It doesn’t cost you anything to attend most chamber of commerce meetings or to volunteer at community events. Personally, I never really liked doing this type of networking, but it works! And when your budget is tight, this is a great way to get your name out there to try and stir up some business. Yes, you may end up with some low-hanging fruit, but it’s better than no fruit! Another way to do this is to offer discounts to new customers for paying for a portion of your products or services upfront. Everyone likes getting a good deal, and this creates a win-win because your customer gets a lower price and you get the benefit of some much-needed cash. This probably isn’t a good
long-term strategy, but it’s obviously better to have something than nothing when you’re cash-strapped.
If either finding or selling a new customer/client doesn’t seem to be working, you may want to consider trying to sell some of your nonessential household or personal items on the internet. When I was really struggling financially, I resorted to selling all of my golf clubs on eBay because I needed some money to pay our bills. As a former pro golfer, it was strange (and extremely humbling) not to own any golf clubs for a couple months. However, desperate times sometimes call for desperate measures. During this time, I also sold old clothes, books, etc. — you’d be surprised how big of a market there is online for almost anything. It’s embarrassing to admit, but at one point, I even resorted to buying stuff from my local Goodwill and then turning it around and reselling it on the internet for a small profit. Ultimately, there is obviously no one-size-fits-all solution for beating those famine months, but these are a few strategies you can implement as you grow and develop your business. We all know that starting and growing a business is hard. It’s always good to have strategies in place you can try to help even out your monthly cash flow.
DON’T LIVE IN FEAR, TOPH IS HERE!
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