When the novelty of being your own boss wears off, many small business owners find themselves stressed out. Here’s a look at several stressors that many small business owners face, along with solutions.
1. Feast or famine cycles of cash flow
You may have several big projects one month, followed by a leaner month once those projects wrap up. Or perhaps demand for your services is seasonal: for instance, if you run a landscaping or wedding planning business.
Whatever your line of business, erratic income can throw you for a loop. After all, your living expenses may be consistent from month to month even if your income isn’t.
The fix: One way to smooth out cash flow is to set up one or more “anchor” clients on a monthly retainer instead of just working on an as-needed basis. This is likely a client who’s a good fit for you and wants an ongoing relationship.
The benefit to you is steadier income, and the benefit to them is better budget forecasting and the assurance that you’ve reserved a set number of hours for them each month. Once you have a retainer client, you can set up recurring invoices to streamline invoicing, saving yourself some administrative time too.
2. Getting paid on time
Getting paid weeks or months after you complete a project is no picnic, but it’s a reality for many small business owners. (And for clients who ghost you before paying, here are steps you can take.) Late payments not only frustrate us but can create cash crunches.
The fix: Use invoicing software that makes it easy to make and track professional-looking invoices with a clear set of invoice terms and be sure to invoice promptly. Automate reminders to avoid those awkward conversations. You can even consider charging late fees.
3. Staying in control of income and expenses
Many small business owners just want to focus on doing their work and serving their clients.
It may be a lot less exciting to keep detailed records on of the work you’ve performed, or the expenses you’ve incurred along the way.
But a lack of organization can create huge headaches come tax time, as you scramble to find invoices or receipts. The other problem with haphazard accounting is that you may not realize that your expenses are out of whack, or that you’re about to hit a slower period in your business.
The fix: Keeping organized records throughout the year is a lot easier than gathering it all during tax season.
Using a tool that integrates invoices and expenses helps you create straightforward business reports. You can even scan expense receipts on your phone so you’ll never worry have to worry about misplacing a receipt.
Plus, tracking your profit and expenses over time helps you assess how your business is doing, which will give you a better sense of control as you grow your business and help inform smarter business decisions.
This post was originally published on the FreshBooks blog and has been revised for Creator Magazine.