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How to to Streamline and Steady Your Cash Flow · Business for Humans

0:00
Hi. So this is turning out to be a back to basics series.
0:08
So last week I talked about revenue, setting rates, profit margins, all of that.
0:15
And I know it gets dull and dry, but it's all the really important foundational
0:20
pieces of your business.
0:21
When I start working with a client who's
0:24
running a small business and I start with an audit I always
0:28
look at the basics first because I
0:31
don't want to try to jump in at some complicated level when the issue might
0:37
be something kind of at that foundational level and it doesn't mean you're doing
0:41
anything wrong it doesn't mean you should know all these things it's just like
0:46
anything So I wrote a LinkedIn post recently,
0:49
and I mentioned that I used to be IT support at a school.
0:53
And I would say that 90% of the time, the thing that would solve the problem
1:00
would be turning on the printer, or literally just like rebooting the computer.
1:07
And, you know, I was getting paid like whatever,
1:11
a fair amount of money as a young person to be IT support when really if everyone
1:16
just tried those two things first, I probably could have gotten by with like
1:22
five hours a week to do website updates or whatever.
1:26
So it's always good just to go back to the foundations and it doesn't mean anything about you.
1:32
It doesn't mean you're doing anything wrong. So I always start looking at people's rates and,
1:37
And you can go back to last week's episode to kind of recap on that.
1:41
And then I like to go into where are you prioritizing your time?
1:47
And one of the real basics is that a lot of people are like,
1:53
I don't have, there are two sides to sales.
1:55
People are saying, oh, I don't have enough leads. I don't have enough leads.
1:59
I don't have enough leads.
2:00
And so they go out and focus on marketing, right?
2:03
Or they're like cash flow
2:06
is weak cash flow is weak and they have all these
2:09
invoices stacked up that they haven't sent out or they
2:12
know they're supposed to send them out and they haven't sent them out so this
2:16
is a foundational piece that i tell
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business owners all the time the thing that
2:22
you want to prioritize is anything that immediately brings in money and that
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means invoicing so again And like going back to basics doesn't mean like the
2:31
exciting part because marketing can be flashy and fun and sending out invoices
2:36
can be really dull and dreary.
2:40
But I want you to go back to the basics and I want you to figure out how can
2:47
you automate invoicing?
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How can you delegate invoicing?
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How can you make sure that the invoices that need to be going out on a recurring
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cycle are set up to go out on a recurring cycle.
3:00
I just talked to a client who is leveling up the client relations team,
3:07
the account management team.
3:09
And basically, one thing they've been asking the account management team is,
3:13
can you give us a schedule like the CEO and the chief financial officer accountant?
3:22
Hi. So what I'm realizing is that I am doing a back to basics series.
3:28
And today I want to talk about prioritizing your time, maximizing cash flow,
3:35
and figuring out how to generate leads in a way that isn't fatiguing.
3:42
This is back to basics because in last week's episode, I talked about rates
3:47
and profit margins, and it might feel kind of dreary.
3:51
You might think, but this isn't the fun part of running a business.
3:54
And you might also wonder, am I doing something wrong, right?
3:59
Do I feel bad about myself now because I haven't been focusing on these basics? And no.
4:05
I told a story the other day that I used to be IT support at an elementary school.
4:11
And 90% of the time, I was literally turning the printer on because they were
4:17
trying to print and didn't realize it wasn't on, plugging it in. I am not kidding.
4:23
Plugging it in or rebooting the computer. And it doesn't mean that there was anything wrong.
4:29
It's just like sometimes we forget to go back to the basics before trying to
4:35
solve something that feels more complicated.
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I mean, people were thinking I needed to like log into Terminal to fix the issue
4:41
with their computer when it was literally not plugged in or the printer wasn't plugged in.
4:47
And it's okay, but I think if we go back to the basics,
4:50
we end up saving money because I could have gotten by in that job five hours
4:55
a week doing website updates if I didn't have to go around to each room and plug in the printer.
5:02
I mean, it's literally, this is business also.
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And when I start working with a client that,
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I always start here. I always start with a very basic audit of what do their rates look like?
5:17
What do their profit margins look like? And where are they spending the majority of their time?
5:23
So again, we try to solve complicated problems with complicated solutions,
5:30
when really it's just going back to basics and making sure we're aligning to
5:36
some of the things that are guaranteed revenue generators in our business. And what does that mean?
5:44
It could be as easy as automating your invoicing.
5:48
So I just did this the other day and I can't believe it took me so long to do
5:53
it. So I moved to a new accounting platform.
5:56
Last year, I moved to a new accountant who has been the best, the best.
6:01
If you need a recommendation and you're in Europe, I would highly recommend my accountant.
6:06
It just changed the way I look at the business, working with someone who gave me the basics.
6:13
The foundations, and helped me realign and have more visibility into my accounting.
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So anyway, I moved to a new software, and I have recurring retainer clients,
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and I just automated all of the invoices.
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It might seem so simple, but prioritizing money in is always where you want
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to focus your energy first.
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People complain about cash flow, they complain about leads, they complain about
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revenue, and really the simple act of sending out invoices on time is
6:54
is a way to secure cash flow and to prepare cash flow and to understand how
7:01
money is flowing through your business. It seems so simple. And I know you're
7:05
probably like, what? How is that a thing?
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I talked to a client yesterday who runs an agency and their account people have
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not been creating an invoicing schedule for the accountant.
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So the accountant is sending out the invoices, the team is not telling them when to send them out.
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So there's a cash flow crunch every month.
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The other thing that's interesting about this is the dynamic with your client.
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Your client is waiting for an invoice, right?
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They've built it into their cash flow for the month or for the quarter.
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If you're late with that invoice, it's not great client relations.
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I had two experiences with vendors working with me recently.
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One person finished the work, sent the invoice on the same day.
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Love it. It was so great. I didn't have to chase them for the invoice, which is ironic, right?
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Like I'm telling them, I want to pay you for the work.
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Give me the invoice, right? I didn't have to do that. They just finished the
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work on time, on schedule, sent me the invoice the same day that the deadline was due, right?
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Another person worked with me, dragged their feet.
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I had to chase them for the work. And then it was a month that I then had to
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remind them for the invoice.
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And it was another two weeks. So
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I had their invoice scheduled for the previous month. It was in my flow.
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It was, you know, considered in that I didn't get the invoice for the next month.
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They put a very quick return on it, like a very quick net payment date on it.
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And I was like, no, now, sorry, I had to wait six weeks.
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You're going to have to wait six weeks. So it's, it's not that kind to your clients.
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You know, you think, oh, it's a money thing. It's I need to,
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you know, make it into something. It's a thing.
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Oh, I'm worried about sending them an invoice.
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It's been agreed upon. It's actually kinder to send it sooner rather than later.
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And it's just, again, it's kind of like plugging in the printer.
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You might think this is common sense depending on where you are in your business.
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It is number one, the thing I work with my clients on. I work with them on rates
9:24
and profit margins first.
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I look at what they're charging, what kind of projects they're putting forward for their clients,
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how much they're charging for those projects, and if it aligns with how much
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work they're putting in because a lot of my clients over-service and then they're
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losing money and they don't really see it as a losing money scenario,
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but they're losing money and they're ending up potentially breaking even at
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the end of the year because they're over-servicing so much. That's number one.
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Number two is they're not managing their cash flow in a way that's bringing
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in money and they're not prioritizing that bringing in money first.
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It's interesting, but I want you to look at that. Are you spending time making
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sure that those invoices are going out?
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You can easily automate that in a system. You put a due date.
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You just blanket them all in. You can delegate that work to someone.
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Make sure you're doing that regularly and checking in and then working with
10:29
your accountant or looking at a cash flow spreadsheet,
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which I have a great template for if you want it, just email me and I would
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be happy to share it with you.
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But make sure you're monitoring that because you can very easily get stuck having
10:46
paid more money out than you're receiving, paying vendors before you get your money in.
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So make sure you're setting up an invoice schedule that is billing your clients
11:00
when the work is done. So there's that.
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Also, look at your payment terms with your clients. If you are billing them
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at the end of the project.
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You're going to be out money before you get paid.
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So if you're working on the project, let's say it takes you a month,
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let's say it takes them a month to pay, you've now been out of money for two months.
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You're paying money out, you're spending your own time, which is money,
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and you're not getting paid until two months later.
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So make sure that you're creating some kind of mechanism in your invoicing payment
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terms with your client that allows you to get paid some money up front.
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Maybe there's a mid-project payment, and then there's a final payment at the end.
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There is a lot of mindset stuff that comes up when I start talking about these basics with clients.
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And there's a lot of guilt around, and I'm shaking my head if you're watching
12:01
the video, because people feel guilty about sending invoices or asking their clients for money.
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We need to work on the guilt. That's a coaching problem.
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It's not a problem in your business. So if you're feeling reluctant to charge
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a deposit on a project or to charge something midstream in a project,
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this is a coaching problem.
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Okay, if you're feeling like you have guilt or hesitation about sending these
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invoices out, then let's coach on that.
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If you don't feel like you have that issue but
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you notice that you're not scheduling payment terms
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in that way then what I want
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you to do is go back to your scopes of work your purchase orders your proposals
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however you're relaying this information to your client maybe it's just a casual
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email I want you to go back and I want you to restructure that so that you are
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getting a deposit up front.
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Some people get, you know, paid 50% of rent, I would say 25, 20 to 25 is a good number.
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Ask for 20 to 25 upfront, get that paid before you start working.
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Okay, this is another pitfall that my clients fall into.
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And also old agencies I worked at would do this, they would start the work feeling
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like they need to somehow prove something to the client before they got paid.
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This is a major, major pitfall. So they start working, the agreement hasn't been signed.
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And they're working, working, working, thinking they have to prove something.
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And then what's happened, what I've seen happen is that the client is like,
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wait a minute, we don't have a signed agreement here.
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We're not actually ready to move forward.
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And a bunch of sunken time and effort has been put into that client that's not going to get paid for.
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This is not a rare thing to happen in a business, small or big.
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I've seen a lot of people do this and fall into this pitfall. Wait.
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I don't care what the deadlines are and that you feel like you're going to be behind.
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That's the client's issue. So if deadlines need to move because they're dragging
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their feet, not paying the deposit or signing the agreement,
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that's not your problem.
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You don't need to race to any finish line, that's for them to decide.
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So you can very transparently say, we can't get started until it's signed,
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until we have the deposit payment in the bank.
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And then we can get started and all the timelines are going to have to change
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to accommodate that. That's just business.
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That's not being mean. That's not being rude.
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That's not something that you need to reconcile.
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But if you do have hesitation about any of that part of charging a client,
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that's a coaching problem.
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And what do I mean by that's a coaching problem? It means it's a mindset shift to work through.
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It's not a fundamental business issue.
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So if you're making up excuses like, well, my client this, my client that,
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they don't have a lot of money, but you're making a lot of excuses for them
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not paying their bills, they're not a good client.
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That means you're in a business relationship with them. There's nothing personal about that.
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You do work, they pay you for the work, period.
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So if you're feeling guilty or you're feeling lots of feelings,
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let's work through the feelings over here so you can do the business you need to do over here.
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I like to go left for the feelings and right for the work. I don't know why. That's what I do.
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Your feelings should not be a part of this process with your clients.
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So again, if you're feeling hesitant, if you're feeling.
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Afraid if you're feeling guilty these are
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things we can work on on the side let's just
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make sure you're just doing these fundamental things which
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are going to make your business feel like a business and not like you're doing
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work for a friend and you feel guilty about charging them it's a whole different
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thing so get that deposit up front don't start work until you get the contract
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signed, you get the deposit, you get the deposit,
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And then you can create a payment cycle. And now, again, now it's going into
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your cash flow and you need to make sure you're invoicing on time.
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So if you tell them you can't get started, don't wait for the invoice.
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Don't make that second priority. That's first priority.
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Getting money in the door is always first priority. Okay, I hope I've hammered that home.
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But it's literally like plugging in the printer. It seems so much like a common
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sense thing and it is 100% a pitfall that I would say 75% of my clients and
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most of the agencies I've worked at get started on the work before the contract is signed.
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And it is a mystery to me. And again, no judgment. I'm not trying to judge.
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I just don't understand how you can do it. I don't want to work and not get paid.
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It just seems a little bit counter to the whole idea of a for-profit business. It feels like.
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You're doing a hobby and you feel bad for charging for the hobby.
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You have a skill. You're good at this.
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This is what people are paying you for. Just bill them. Get paid for it.
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Simple, simple, simple. But it's not that simple, right?
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And again, I don't want it to seem like I'm judging. I just want you to kind
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of see from the outside that there's no reason to let your feelings get in the
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way of sending out invoices.
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And I am so happy to help you through that.
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This is what I do. Right. And again, like we'll just figure out why.
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Why are their feelings getting in the way of you sending out invoices?
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So that is a back to basics, fundamental.
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Send out the invoices, automate them if you need to, get that contract signed
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before you start working, get the deposit in the door, don't sit on the invoices. Okay, number one.
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Now, when we're talking about getting people in the door and sales,
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right, the thing I want to really harp on here is that your current clients
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are your best place to focus.
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Okay, so again, what happens a lot of times with particularly with small businesses,
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is they might have a really, really amazing client.
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Their ideal client walked in the door, wants to pay them well, is easy to work with.
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And then they get into a scarcity mindset and they start looking for other clients.
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And now this client who's amazing gets kind of the like.
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Less of a priority. The focus is less on that client who's amazing.
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And then all this energy is going to trying to draw in cold leads.
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So nurture your current clients first.
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Again, back to basics. Your current client, the ideal thing you want is to make
19:41
an impact on their business, make an impact in whatever way you make an impact with your services.
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So if you're, you know, a wellness coach, you want to help them find transformation and health, right?
19:54
Ultimately healing and all of that. So you want to put your first priority energy
20:01
towards your paying clients, nurture them, develop a long-term relationship with them.
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That is going to be really good for your business and not just good for your
20:12
business. I'm not just talking about all this for growth and profit and all of that. We're in this.
20:19
You listen to me because you're a purpose-led, ethical-minded person with morals
20:26
who wants to make an impact, wants to have a job that you feel good about,
20:30
and you believe in your skill set.
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So that's what we're talking about here. You want to make an impact.
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So you want to make sure you're nurturing that person, that client,
20:43
that company, and helping them get where they need to go.
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That's your zone of genius, right? Like helping make impact in the area that you help.
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You help make impact in. So nurture those clients, look for new opportunities,
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get out ahead of things for them, make sure they're not chasing you for the
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work, but look for opportunities on their behalf, right?
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They're your client. When I bring in a new client, my brain gets so full of
21:17
trying to find things that will benefit them.
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So it's fun when a client comes through the door, I just feel like every podcast
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I'm listening to, when I'm reading books, when I'm out in the world, I'm like,
21:30
they're in there. And I'm kind of like, oh, how would this affect them?
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Or, oh, this could be really good for them.
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Or, oh, I want to make sure I share this with them.
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It's just this part of my brain gets turned on where now I'm like,
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just thinking on their behalf.
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And that's what makes a client feel like this is five star service, right?
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Like I'm, they're not chasing me. They're not only getting what's outlined in,
21:55
you know, the program bullet points, they're getting access to my brain,
22:00
the way my brain works, the connections I'm making for them,
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you know, relationships too.
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If I'm out in the world and I'm talking to people, I'm like,
22:08
oh, I have this client. You definitely need to talk to them.
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That's like my favorite thing to do is to connect my clients to people I know
22:15
or connect clients together.
22:19
So I'm always kind of thinking on their behalf. And it feels much more like
22:24
a bespoke relationship when they feel like I'm really paying attention. I'm really engaged.
22:30
I'm really, you know, looking for things on their behalf.
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And I would say that is a really major thing that a lot of my clients,
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not a lot of my clients, but I think like small, because my clients aren't me.
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They don't, they don't like not nurture their clients.
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But I think a lot of small businesses tend to do this because they're so focused
22:49
on growth, scaling, growth, scaling, profit, profit, profit.
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They're out like trying to draw on leads, leads, leads.
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This is why we get bombarded by AI tools and companies who are like,
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I'll give you leads, I'll give you leads.
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And really what we're forgetting when we try to pull in leads is that we have, hopefully.
23:09
Already a group of clients who are incredible people that we want to make sure
23:16
we're nurturing and supporting.
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And what is always the irony of that or the halo effect of that,
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it's not ironic, but the halo effect of nurturing our best clients is that we will get referrals.
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I mean, and that is obviously the best sales tool of all because you know this
23:37
ideal client, They know you.
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They know how you work. You think they're amazing.
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They're going to go and pull in more people like them.
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So don't forget your best clients when you're on the path to growth or scaling.
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Nurture them and try to develop long-term relationships with them.
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Even if you have a short-term project or the way your way of working has a timeline,
24:06
figure out a way to continue that relationship after that program date ends.
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I am so proud to say that most of my clients stay with me for two to three years.
24:19
And I think it's just because we develop a relationship and they and they continue
24:24
to lean on me as they move through their career or their business in different phases.
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And I may not hear from a client, even for a year, and then they come back and
24:34
they're like, Oh, I need to start working with you again.
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There's this thing going on. And you're the person that I really want to,
24:40
you know, work with on it.
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And it's amazing. And it just makes my heart swell that I have built this community
24:47
of people who feel like they can come back again and again.
24:51
It's not like the door closes at the end of a program, and then that's it.
24:56
There's always a way to continue to work with me. And I try to keep those doors open, whether it's.
25:02
Providing the opportunity to work with me one-on-one. I'm doing that actually in March.
25:08
Once a year, I just open up to the public. You can book a one-on-one session
25:12
with me rather than signing up for some kind of program.
25:16
And again, it's just a way for me to engage with more people,
25:20
give access to more people who are like, I think an hour is enough for me to
25:24
kind of work out some of the stuff I've been thinking about or sitting on.
25:28
I just need some feedback. I need to throw some things around with someone.".
25:32
Ideas or brainstorming or I, you know, I have people who are like,
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I'm a manager and I'm having this really difficult time with my,
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you know, this person on my team. I don't know how to manage this issue.
25:44
I'm going into performance review with them. Like, how do I manage this?
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Let's just hash it out in an hour.
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So I'm always trying to find ways to give access to people beyond kind of the
25:58
cut and dry programs that I run.
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So if you're in a service industry where you have these kind of cut and dry
26:05
program offerings, or you run strategy sessions,
26:09
maybe just, you know, allow for an opportunity once that project is done,
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what else could they do with you?
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How else could you be creating impact on a longer term basis with them?
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If your business model is such that there's like a start and an end to a project,
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what else could you be doing?
26:29
Nurture your current clients first.
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Okay, so to recap, money in, first priority, invoicing, consistency with the
26:39
invoicing, get contracts signed before you start any work, get a deposit in
26:44
the door before you start work.
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This is going to support your cash flow. Money in, always first priority for a business owner.
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Okay, once that is set, and you've figured out, like you talk to a new client,
26:57
you got that contract signed, you got that deposit in the door,
27:01
set up the next invoices, automate them, right?
27:04
Put them in your system so they just go out without you having to think about it, okay? Number one.
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Then, number two, when you're thinking about sales, when you're thinking about
27:14
growth, consider your current clients first.
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Where can you make more impact with them? How can you nurture them more?
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How can you create a longer-term relationship with them?
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Start there. Ask for referrals.
27:28
Ask for testimonials. These are the people you want in your business.
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So continue to find ways to nurture those relationships and open up relationships
27:38
that are similar or in their network.
27:43
Okay, those are back to basics. I'm going to do one more episode next week that's
27:51
a back to basics episode. You can listen to last week's episode,
27:54
which is about revenue and profit margins.
27:57
Again, it's kind of dry, but I am telling you, these basics are where people make the most money.
28:05
Without changing anything, without any change management or team change or hiring
28:11
or firing or anything, you just tweak these small things, plug in the printer, and it is magic.
28:19
So I'm going to leave it at that, and I'll talk to you next week.