The idea of financial freedom often feels so out of reach, doesn’t it?
This is particularly the case if you work for yourself or run a small business. You work hard but don’t always get to reap the rewards because you don’t know what’s around the corner. Peaks and troughs are an inevitable aspect of every year.
Or are they?
Why should you end up with a year-long ticket for the ‘feast and famine’ income rollercoaster if you’ve got entrepreneurial spirit?
Why are you always wondering how to improve cashflow?
Why does your bank balance rise and fall constantly?
This will be a familiar feeling if you’re in the business of selling your time but have so little of it to offer because you’re both chief chef and junior pot washer.
The good news? You CAN gain financial freedom and free yourself from the chains of feast and famine income.
Why cash flow management is so difficult
The result of this is a rollercoaster of a cash balance for your business.
One moment it’s great, then it hits a plateau. Then, before you know it, things get really tight ‘between jobs’. You might start to get a bit concerned for the future.
It’s cyclic and you feel like you’ll never reach financial independence if it continues. You’re FOREVER chasing your tail.
There’s a good reason for this and it’s a common challenge for small business owners, freelancers, and entrepreneurs.
- Stage 1: Your first priority is to get work, so you spend time prospecting, marketing, and selling.
- Stage 2: You work on your new priority, which is to deliver the services you’ve just sold.
- Stage 3: Time to focus on finding the next client subsequently evaporates.
- Stage 4: The current project finishes, leaving you with the new priority to look for new work.
- Stage 5: Return to Stage 1.
And so it continues. Again, and again.
The net result of this is that you end up on a hamster wheel of hunt, deliver, and pay the bills… ad nauseam.
It’s why you’ll probably scoff whenever someone says that you should be in this for “the long game”.
What on earth is the long game if you can never see beyond the invoicing process for your current job?
Is there more to work than just paying the bills?
The hamster wheel we’ve just described is relentlessly frustrating. And just like anything which becomes the norm, it’s much easier to stay on it than it is to stop, take stock, and make a change.
But that’s what you’ll need to do if you’re to finally answer the question of how to improve cash flow - for good.
Some business changes are forced, while others need to be sought proactively by the business owner.
4 strategies for improving cash flow
Like anything in life, it’s best to break this stuff down, which is why the changes you’ll need to make to jump off the income rollercoaster can be neatly placed into the following four categories.
- Change your MODEL: stop selling your time. Instead, use value-based pricing; your time is valuable, but it’s nothing compared to your experience. How much is that worth?
- Change your OFFER: you might think that promising everything is the way to win clients, but few clients actually want everything. By instead promising less without reducing your fee, you’ll deliver the results your clients really want and gain time yourself.
- Change your POSITIONING: being in demand is a serious selling point. If you position yourself as a specialist, rather than ‘one of many’, you’ll go from an entrepreneur who is time-poor to one whose time is so valuable there’s a waiting list for it.
- Change your CAPACITY: stop doing everything yourself. Simple.
That last point might be the hardest to work on, but you do need to work out how to let go.
Make a list of the things you do regularly which you know, deep down, should be done by someone else - and hand them over to someone you trust.
Financial freedom is just around the corner. You just need to get off that feast and famine rollercoaster!