Cashflow is the reason many businesses don’t make it, so it ends up being ignored when we talk about our businesses. According to Score.org, “82% of small businesses fail due to cash flow problems.” If you are struggling with cash flow, I hope you can rest assured you are not the only one.
A big reason businesses struggle with cash flow is because they lack longterm vision for their finances.
When you have cash flowing in, it’s a celebratory time. Our minds jump to rewarding ourselves with a designer purse, taking the team out for a happy hour, or a trip to The Bahamas. Slowly but surely, reality sets in. When you are in a place of inconsistent cash flow and are now struggling with cash flow, you begin to panic and worry about how you’ll be able to pay your employees.
This feast of famine rollercoaster scenario is common among business owners who do not have a steady handle on their business finances. In the early days of my business, I had similar struggles. I was billing hourly, undervaluing my services, and would skimp on paying myself if cash flow in the business wasn’t going well.
What changed everything for me and helped me to get out of unhealthy financial cycles was realizing that I needed to run my business like a business, or we wouldn’t be a business for much longer.
There is a natural progression in businesses and you will find that every few years you crave a change. For me at that point, I needed to change how I was billing. By billing hourly, you forgo consistent income you can rely on. What I needed to do was set up package deals and implement value pricing.
In future posts, we will discuss how this change completely transformed the cash flow of my business. This is how I went from struggling with cash flow to having a consistent, reliable income. So what can you do in the meantime to strengthen your business, even if your cash flow needs some work? Work on creating strong, trustworthy relationships with your clients. People put their money towards companies they trust and believe it. If you want to see real change, that is where you have to start.
If you are struggling and want to improve your cash flow, reach out to us. We love working on this and we know we can really help make a difference in your life.
Author: Gabby Luoma