Last week I answered some very tough questions on our Cash Flow call. The call was a huge success and we had many people on the call, we’ll do another one soon!
One of the biggest problems that solo and creative entrepreneurs have is they just don’t know where their money goes. They don’t track it and they don’t plan for it. Here are some steps to get you going in the right direction to start a positive Cash Flow Plan for yourself:
1- Start a money diary and track all your incoming money and your expenses for the next 2 weeks. Make detailed entries so you’ll know where your money is being spent. This is not about judging right or wrong on your spending habits. This is a tool to see where you can take control.
2- Put together a reasonable budget for a month. Personal and Business. List all your outgoing bills and estimate what they were for the last couple months and what you anticipate them to be for the next couple of months (remember to take in to account that warm months and cold months can make utilities fluctuate a bit.) Now calculate what your monthly incoming money has been for the last couple months and what you anticipate it to be the next couple of months (take in to consideration if your business has a seasonality to it.) Don’t forget to include a budget for entertainment and eating out. Setting a budget is a great tool to give you the courage to raise your prices to meet your budget needs.
3- Pay yourself first. Make sure you include yourself in your budget and make sure it’s not starving artists’ wages. If you have to start off small, that’s ok but include yourself in the monthly bills.
Repeat after me: “My money is the tool to give me the life that I want!”
Knowing exactly what money is coming in and what money is going out is a great start to treating your business like the success you want it to be.
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“Now you know.
And knowing is half the battle.”
-GI Joe
