Rollercoasters are exciting and fun, but not so much when you are experiencing them with your cash flow in your business.
I’ve been there. I’d be flush with money and convinced I’d finally “made it,” only to be scrambling to keep my electricity on within a month or two. In fact, I went through the feast-and-famine cycle more times than I can count. It can kill your confidence and your morale, as well as generate some seriously problematic financial circumstances.
Here are the most common mistakes I see entrepreneurs make that keep them in a feast-and-famine cycle, and what to do instead.
Mistake #1: Working on projects one at a time. Working on a big project for even a few weeks will kill your cash flow. Proper planning will help you avoid this trap. Use project management software, mind-mapping, a good old-fashioned white board or hire someone who’s great at planning to help you multi-task your projects.
Mistake #2: Focusing on Later Money at the expense of Now Money. This is where you dive into activities that are likely to generate big money down the road, while you neglect activities that will sustain you in the mean time. Once I had a follow-up reminder pop up on my computer every day for three weeks while I was in the throes of launching a new program. I was so focused on the launch, I failed to make one simple phone call to follow up with that hot prospect – someone who had already told me she would probably be ready to start soon. My launch had a lukewarm result. I spent over 50 hours to launch something that made me $5,000 and lost the $5,900 prospect in the process. “I’ll call her later today” just isn’t good enough. Anytime you have low-hanging fruit, reach out a grab it!
Mistake #3: Being survival-focused at the expense of creating sustainable, scalable solutions. Yes, you have to stay out of survival, but if you never make decisions answering the question, “What do I need to do now to set me up for long term success?”, you’ll be chasing the money forever.
Mistake #4: Failure to create a passive income stream that will let you take a break or have a vacation. Not doing this will cycle you into burnout, because you’ll never get to take a break. Once you move into burnout mode, you’ll be physically and mentally unable to create more income. Your business needs to take care of you, not the other way around.
Mistake #5: Pushing too hard. Intersperse big projects and launches with easy profit-generating activities. This will allow you to preserve your energy and avoid burnout. (I got this tip from Sandra Gardner. She’s an amazingly brilliant jane of all trades, thought leader and all around cool person.)
Mistake #6: Failure to stop and think. When you have a cash injection, take off your Sales Director hat and put on your CFO hat right away. Your impulse may be to go out and splurge. By all means, reward yourself for a job well done, but first, think through what needs to be done with that money so you can create financial safety for your business.
Mistake #7: Making things too complicated with too many products, offers and projects. Keep it simple, or you’ll create an elaborate labyrinth you’ll have to navigate your way through just to find the money to pay your rent.
Mistake #8: Focusing on a risky project when you need cash flow right away. Yes, you have a great big fat wonderful idea. But when you need cash, always reach for the low hanging fruit. The project can wait – and if you launch a risky project with a huge payout opportunity attached, it will be much more successful if you don’t do it from a place of “This had better work.” (See #12.)
Mistake #9: Refusing to wear all of your hats. Sorry, but unless you have a lot of capital, you’ll have to wear a lot of hats for awhile, and you have to wear them every day. Yes, even the ones that don’t look stylish on you. I once realized that I had put my CFO hat away for two months while I put on my Marketing hat. Oops. I lost track of the money in my business, which is never a good thing.
Mistake #10: Failing to find the weak links in your business and strengthen them. An example is being a poor money manager, but being great at generating creative ideas. A creative idea is only as good as the implementation, and the money it creates is only as good as the decisions on what to do with that money. If you can’t or don’t want to learn new skill sets, find a way to surround yourself with people whose strengths complement your weaknesses.
Mistake #11: Only focusing on money-generating activities when your cash starts to run out, which for most entrepreneurs, is pretty fast. You work on creating income, and then once it comes in, you stop. Do money-generating activities even when you’re flush with money, and you’ll never be in a famine again.
Mistake #12: Taking action when you’re in the wrong state of being (or energy). You know that desperation you feel from time to time? Your buyers can feel it, too, only amplied times a thousand. It repels your buyers and makes all your action pointless. Even if they badly need your solution, they will run the other way as fast as they can. Sometimes, you have to be willing to wait. Your state of being is everything. It creates your results from the inside out. Don’t believe me? Track it. Learn about the four states of being here.
Avoiding these mistakes will even out your cash flow, and that will put you on a better, easier path to success. Not only will your bank account be happier, but your confidence will soar and you'll reduce your stress level dramatically.
Which of these mistakes could you stop making right now that would create the greatest impact on your cash flow? Feel free to comment below … I'd love to hear your input!
Beth A. Grant is a writer, speaker, marketing strategist and thought leader who helps you be yourself in business, in love, in life. She blogs at www.truthandconsciousness.com