Building a business was not something I thought I’d ever be doing. It was just never on my radar. I never saw myself as one of those serial entrepreneurs who was completely set out to do her own thing. In the laundry list of sky- high goals that I had for myself, business ownership was most definitely never on it. It sort of found me, which brings such amazing highs, and some major challenges.
Doing “what you love” and “not having a boss” is easy to hype up. So easy. But there’s very real tradeoffs to the security and comfort that might come from a job that’s just OK, which is why I’m working with Intuit QuickBooks — to dig into some challenges you might face when and if you decide to do your own thing – especially when it comes to cash flow.
There are two times a year my girlfriends will listen to me freak out because my income is going to be “lumpy” or irregular that quarter. Money owed to me won’t be paid for two months and instead will hit all at once. The cash flow struggle is real…so real. And any person who owns a business will tell you the same. They’re either trying to figure it out themselves (currently me), or they’ve messed it up at one time and have the war stories to share. It’s normal. About 2 in 5 business owners have struggled with cash flow according to a recent QuickBooks report. The study also found that 61% of business owners say they regularly struggle with cash flow, meaning I’m clearly not alone in the journey to figuring it all out – and neither are you.
Here’s a few things I’m constantly keeping in mind as I try and figure this out myself:
First, you must realize that managing cash flow requires preparation. If you know that you have one large payment coming in at the end of the month, versus being spread out throughout the month – plan ahead with your business and personal expenses so you’re not caught off guard.
Second, having a healthy cash flow coming in and out actually requires moving money into reserves. The last thing you want to happen is that you run out of money before you complete a project or before a major bill is due. Being good about moving funds on an ongoing basis to an emergency fund can ultimately save you during some of those lumpy cash flow moments.
Finally, staying on top of cash flow requires staying on top of invoices and not being afraid to follow up with your clients. The latter took me a minute to get comfortable with and now I’m constantly on top of my money, including when I am getting paid, reminding clients about upcoming or past due payments, factoring in for processing time and sending follow-ups. Luckily, Quickbooks has payment functionalities that make my life a whole lot easier (like invoice management and next day deposits after a qualifying credit card, debit card, or ACH transaction). I track each stage of my cashflow in a really handy pipeline spreadsheet so I can easily see where each deal is at.
Honestly, when I first started my business a few years ago I wish I had known about these tools and that everything I was figuring out on my own was normal. Now, I talk to my #girlgang ALL THE TIME about these things. We’re all figuring it out together. The more you open up conversations like these, the more you can find the resources you need.
This post was created in partnership with Quickbooks Self-Employed. So many of us are figuring out this dream together…I wanted to let you know what helps me!