It seems to me that in the midst of growing a business from strength to strength, not only are there so many tasks to complete and your to-do list feels as long as your arm, but you forget some of the basics that can make you feel sooooo good. I’m a true believer that you don’t need $1 million in the bank to have the feeling of financial freedom or success. And that in some cases you can have $1 million at hand but feel like you’re financially overwhelmed or swamped.
Do you remember receiving your first decent pay cheque? You excitedly pay your bills (in full), or run off shopping. Financial freedom, baby. This was probably the most money you’ve had in your purse (or bank account) ever! In your business, can you remember the feeling of your first sale? Or the first big client you landed?
But as the dust settled and you continued on the with your work, the feeling dissipated and you get distracted by the most urgent task or the next fire that needs putting out.
One way I encourage women in biz to more regularly hone in on the feeling of being wildly and financially free (on their own terms), is to go back to basics. Acknowledging the pleasures of financial clarity, having cash flow freely through your biz and feeling remunerated for your purposeful direction of your time + energy.
I find once women in biz identify the two main ‘financial building blocks’ and they work out strategies to nail these and they can feel awesome about their finances no matter what!
I’m talking about managing your cash flow, and working a level of profitability into your business to not only survive but to thrive.
So today’s article is all centred around the first of these two points… CASH FLOW.
Financial Freedom Technique 1.
++ ‘Uncomplicating’ your Cash Flow ++
Cash flow is the life blood of business, and women entrepreneurs report that when their cash flow feels complicated or hectic, it doesn’t matter the volume of their sales revenue, the balance of their bank account or how ‘successful’ their business appears to be, it adds a dampener to their day.
Why? Because nobody ever feels true freedom or success when confused or weighed down.
This is not dissimilar to phase I went through when channelling my creative outlet through ‘MasterChef’ type meals for the family dinner. I (not so consciously) had attached the idea of a complex, intricate, swanky food with a successful evening meal. Unfortunately, I felt deflated each time my children refused to eat it, or the meal was a flop with expensive ingredients.
Once I realised that I had made my life more difficult than it needed to be, I adjusted my idea of a successful meal. Nowadays, success is a meal made without a recipe, on basic ingredients that is eaten by all! Such a lighter feeling.
If you wanted to apply this idea to your biz finances, I suggest finding a system with your cash flow that feels efficient, not heavy and easily understood. It’s not all about chasing the next sale. This doesn’t guarantee you will feel financially free. If anything, it adds to the pressure of success as there’s always another sale to be made. If you nail the basics here, you can feel free at every level of revenue you wish to achieve because you’ve made the process to get there feel much lighter, and therefore it’s so much more freeing, right?
Here are some tips to do this in your biz life:
>> Structuring your bank accounts to separate out your money. I write about this a lot (because it works!) Split up your cash into tax, operating expenses and long-term bills or savings. Know of that money what is yours to spend and what portion you need to keep for bills. Clarity is king here.
>> Work out your cash cycle. There are patterns to when money comes in and money goes out. All your bills come out at the end of the month? Do you receive most your income in the beginning of the month? Track your cash cycle for a few months and get some perspective. Then there’s no need to feel down at the end of the month after paying a bucket-load of bills.
>> Review how you feel about your cash. What I mean by this is, do you have reaction to paying tax? Or is there another trigger or bill that hits a nerve. If you react to an expense, dig around a bit to see what’s going on.
Many business owners react to tax, and my response always is… think of it as money that was not yours to begin with. As a women in biz you intrinsically have agreed to paying 15-25% of your income (or even more) to the tax department. And unlike an employee, it has not been taken from your wages before you have received that money. You’re a collection agent for the tax department and need to kindly pop it aside and hand it over to them when asked.
Use this perspective to not react to your tax bills and see how much freer you feel.
>> Finally, I’d suggest to feel in control with your cash, set up policies and procedures in your business that make your cash work well for you. Invoice customers and chase overdue money in a timely manner. Don’t be afraid, a client or customer has agreed to your terms, just ask promptly and politely.
Pay your bills twice a month, rather than waiting till their due date. This not only means you don’t need to be ‘mentally reminding’ yourself that it’s due (which we all know takes up a lot of brain space), but it becomes routine and means you get a better understanding of your cash cycle. Use these boundaries and expectations to move money smoothly through your business, in a way that suits you.
These four tips will get you on the road to better cash flow in no time. And you will also begin to feel like you have more financial freedom the more clear you are around your business’s cash.
Don’t forget there is still once more piece of the puzzle to feel wildly, financially successful (and free!) And I’ll post that instalment shortly 😊
Let me know in the comments below, what do you do to feel financial freedom? What does it mean to you?