Cash Flow Mistake #4 - Missing a System. 

Have you:  Created a beautiful, highly detailed cash flow projection spreadsheet — never to look at it again?  Been six months or more behind in your bookkeeping, until your tax accountant is ready to fire you as a client?  Spent hundreds of dollars on advertising that got you nowhere fast?  Decide if you can afford something by today's balance in your checking account?  Been crazy-busy with clients, and all of a sudden, your business completely dries up?

Here's the Truth:  You need a system.  Managing your cash flow must become a habit.  Each week set an appointment on your calendar for a "Money Meeting" with yourself to review the finances of your business.  Schedule this appointment & commit to it just like a client meeting or doctor's appointment.  Could be as little as 10-20 minutes per week — if it overwhelms you, set a timer for just 15 focused minutes and give yourself permission to stop when the timer says "buzz."

Having accountability issues?  Hook up with another member of the Mastermind and schedule your appointments together.  At the set time call each other to confirm you are reviewing your finances, and send up a follow-up email afterwards to celebrate your progress (no need to share the exact financial details). 

Cash Flow Mistake #3 - "It Must Be Perfect."

I know a new client has fallen for this mistake when they hand me a multi-page, color coded, 40-category Cash Flow Projection spreadsheet.  And it's dated 3 years ago.

In an effort to "do it right," we try to create financial reports that are completely accurate and perfect.  Everything according to Fortune-500 accounting principles, highly detailed notes, extensive competitor research, and sub-part after sub-category.  But what happens?

These beautiful spreadsheets gets stuck in a drawer, never to be used again.  What a colossal waste of your time! 

Here's the Truth:  Simple is powerful. You need short, summarized financial reporting that you can actually use!  You can use two simple one-page spreadsheets to troubleshoot income problems before they start and make powerful planning decisions for the future of your business. 

These two spreadsheets are Marketing & Sales Weekly Report (statistics tracking your sales process and how you generate income) and Monthly Cash Flow Projections (projected income and budgeted expenses).

By the way, perfection is impossible.  When you are projecting the income or budgeting the expenses of your business, you are trying to predict the future.  It's an educated guess.  Your projections will never be perfect — but all you need is information just "good enough" to help you create and make changes to your business & marketing plans. 

Trying to predict weekly Cash Flow?  If you are trying to micro-manage weekly Cash Flow Projections, that's a sign you need short-term financing, such as a business Line of Credit or even a traditional American Express card. 

(part 4 coming next week)

Cash Flow Mistake #2 - "I'm Not Good With Money."

I know some of you reading this article are saying, "but Elizabeth, I'm just not good with money.  I'm not a numbers person."  I'm here to get in your face and say, pshaw!  I don't buy that story!

First, if you are constantly saying to yourself that you are not good with money, what message are you saying to yourself, your clients, and the universe?  Before great wealth will ever manifest itself in your life, you must change the mantra in your brain.   More on How to Avoid the 4 Cash Flow Mistakes, part 2

When you started your business, you may have thought you were going to help people.  Change the world.  Enjoy working at home.  Make a good income.  Have control over your life as a self-employed entrepreneur. 

But what are you really doing?  Checking the bank account to see if you have enough cash to pay your rent.  Cringing at the pile of receipts to input into QuickBooks.  Waking up the middle of the night, wondering if that big client paid you on time.  Hoping that marketing campaign or coaching program will pay for itself.  Getting out your personal credit card to pay for a business expense, yet again.  Opening up a surprise tax bill from Uncle Sam. 

Is managing the fluctuating income and expenses of your small business an ongoing struggle for you?  It may be because you are falling for one of the classic mistakes small business owners make when dealing with the "numbers" side of their business.  More on How to Avoid the 4 Cash Flow Mistakes, part 1

Debt financing, one of the 3 primary methods of financing a business (the other two are self-financing and equity financing), is obtaining money that must be paid back to the lender, usually with interest.  Similar to self-financing, debt financing may include both using your personal credit as well as the credit and security of the business to obtain a loan or line of credit.  More on Dangers of Financing with Debt

Today I'm answering a question about how we should handle competitors who have exclusive deals with other vendors.

Even if you love your business and have no plans to sell, I can guarantee you will not be able to run your business forever.  You may not be ready to create a formal exit plan, but here are a few steps you can take today to create value in your business, in preparation for the future.   More on Don't want to work forever?

Why Using Your Personal Credit Card is Dangerous for Your Business

Many of us (include yours truly) have used personal credit cards to finance the start up or growth of our business.  It's easy, fast, and available.  The interest rates may be lower than business credit cards.  And, you may have exhausted your business loans or lines of credit.  But there are a few dangers in using your personal credit cards to finance your business, instead of using business credit cards or loans.  More on Danger of Credit Card Financing

"Learn the Simple System to Take Control of Your Cash Flow in Just 15 Minutes per Week … So You Never Are Surprised About Your Checking Account Balance Ever Again!"

Fellow small business owners -

Like most of you, I've struggled with fluctuating cash flow over the years.  Everything from the boom-bust cycle of client projects, to using personal credit cards to finance the business, to creating useless reports in QuickBooks, to setting prices too low, to never being able to predict income.  You would think that as a financial expert and attorney I would know how to do this stuff, but they don't teach you how to manage small business cash flow in school.  After investigating all the un-helpful software and books available, the only solution was to develop my own program to take control of my cash flow, and my life!

This Money Meetings system is what I'm sharing with you in the new Cash Flow Coaching Program.  In the Cash Flow Coaching Program, I lead you through the steps of my Money Meetings System AND help you implement the system for your own business, so your business cash flow turns from a struggle to automatic.

Through this program, you will learn:  More on Take Control of Cash Flow - only 10 spots available

Learn how to use Cash Flow Projections. 

A Cash Flow Projection is a chart containing educated guesses of your income and expenses, broken by month to month.  The expenses are projected in the months they actually occur — some of your expenses are the same each month (i.e., you internet fee and your loan payment) and some are occasional big expenses you must set aside money for, like your insurance premium or tax bill.  You create your income projections by taking an educated guess, based upon your marketing plans, your business history, and businesses similar to yours.  Yes, it's just a guess — but it's a place to start so you can measure your actual results against some projected numbers.    More on Want to Learn How to Predict the Future?