A friend phoned last night, struggling with a cash flow challenge that is all too common when starting up a new venture – or recovering from a personal life event. Just like individuals, all businesses face such challenges periodically for a variety of reasons. As the founder, it behooves us to find and build in a system in both our business and personal lives to help us get through these times successfully.
Cash flow represents money coming into and through our lives. Along the way, it is the physical resource that enables us to manifest everything we see in the world around us. If the flow “out” is too rapid, we may not have enough time to use our resources effectively. If the flow “in” is too slow, our abilities are choked off at the start. So, in an optimal situation, cash flows in at a strong, steady pace, is held long enough to utilize its value to us and provide reserves according to a plan, and then passed through for the benefit of all in the supply chain, as well as places where we choose to contribute to the well-being of others.
Our plan to build cash flow and use it effectively should be part of our life and business plan. In the beginning, we may have a viable business plan – for the business – but no plan for the cash flow that sustains us personally while we build the business cash flow.
Answer this: Do you have enough cash on hand or anticipated cash flow to sustain you for a 2 year period (traditionally the time expected to get an operation up and running)? Do you know where you will get that cash flow as part of your business plan? What’s your system to build your cash flow?
Obviously, I feel a cash flow system is important, however, the process begins further back than that with your idea – your vision – and why you want what you want. Your why carries passion, energy and feelings within it. It brings the power to stick with all that has to be done to accomplish your goals. It brings the power of your Inner life and your link to the non-conscious mind. The non-conscious mind links you to creative, problem solving capabilities. It coordinates with the conscious mind to receive great, inspired ideas, set up a plan and take action.
Here are a few ideas to get you started:
- Get clear on what you want and why. Get in touch with your feelings and passion. Document it on paper. Place this paper where you can go back and look at it whenever your energies ebb and your feelings sink.
- Make a list of your existing resources. This is more than just money in the bank. It’s everything – skills used and acquired in school, jobs, family life, community involvement, income earned before and currently, a complete personal balance sheet of assets (stuff you have) and liabilities (what you owe as a result of the stuff you have), what you know, what interests you, people you know, and groups you align with. Think out of the box. Don’t forget your friends and family. Are they in a position to carry some of your nut (monthly cash flow needs)? Are they part of your team? Are you supporting each other to build a better future for your family?
- How much cash flow do you need? When you are pulling yourself up by the bootstraps, start where you are. What do you absolutely need to keep going right now?
- If you know what you want, roll up your sleeves and start to work for it. Trade time for money. Do whatever it takes (mowing lawns, telemarketing) to get a small amount of cash flowing. Be open to opportunities that appear out of nowhere. In my bootstrap plan, I had to make enough to pay for food, gasoline so I could get to and from work, and a minuscule payment on my credit card debt. My first goal was to create positive cash flow – and I was willing to do whatever it took in the short run to get that going. The first opportunity that I found was telemarketing. It wasn’t much – less than 30 hours per week at minimum wage, however, it gave me a cushion to keep looking and to watch for alternate income sources.
- The fastest way is to use skills you already have and the most basic marketing like handing out flyers. To grow beyond that, develop the skills that will serve you well in the future. Learn to pitch and present yourself – verbally and written, through your creative expression.
- To keep money, learn how to manage it – spending and saving it. Spend less than you earn. T. Harv Ecker is a prominent educator on this topic. He recommends using a jar system and regular % contributions to each jar for spending and savings. Using this system, people count their money and keep track of where they are. Whatever you put your attention on tends to increase so by paying attention to your positive use of money, you can make money increase as well.
- Focus on your business in whatever time you can give it. It is one of the best ways to build your financial future, as well as feed your soul. As you build income stability with it, you are not dependent on someone else to give you a raise or keep you employed. You can make the choices that work best for your future.
- You may find you want to throw yourself into your business full time right away. Burn the bridges and leave no possible retreat. That is really a personal call. I tend to follow Jim Rohn’s advice and example in this. He built a successful business working part time until he was successful enough to have twice as much income from his business as he did from his job. It was a great marketing story – to be able to be so successful working only part time! And he and his family suffered far less.
- The ultimate goal for almost everyone is to achieve financial freedom where you can do, be or have what you want whenever you want it. Your own business, regular savings, investing and having a method to earn consistent income even while you sleep are the components of this You can invest your money in something to rent or sell to other people. You can invest your money in learning a skill that enables you to provide a service that others will pay you to do. You can invest your money in someone else’s business and allow them to help you earn more money.
- Your goal is to maintain your cash flow while you are still growing. Get started. Later, you can look to use other people’s money to expand, but that is the topic of another post.
What kept me going during this time of building cash flow? Certainly, the outer game aspects were a big part of it: holding a goal as part of the larger vision, making and working a plan, seeing bits of progress and making time to keep pursuing my vision. However, I also paid attention to my inner game. I worked on my mindset, utilizing Afformations (positive why questions) to bring in the power of my subconscious mind as a search engine for the best solutions.
Cash flow gradually built to cover my monthly bills and provide the resources to publish Rainbows Over Ruins and start to “build a business with my book.” To this date, I still cash flow my business from my job, however, I now have products: the book, an online course, blogs and podcasts, and I’m making preparations to take it “on the road” through speaking engagements and workshops. Cash flow – however you establish it – gets you to this point and carries you into the future as you provide value to your customer base and develop relationships.
When you reach this point, you’ll be ready to decide if you are ready to “take it to the next level” where your business generates substantial cash flow on its own through the value of the products and services you have created. Wherever you decide to take your journey, cash flow provides the power for you to keep doing the work you love with a lifestyle that is comfortable and brings you joy and well-being.
Pay attention to and nurture your cash flow and it will help you grow into the life you want to live. You can do it.
I believe in you,