3 Ways to Increase and Stabilize Your Cash Flow

Every business owner knows that cash flow is king. Without it, no amount of zeros on your top line revenue matters. Yet cash flow is the stormiest and most unsettling parts of being self-employed. After all, you can’t make your mortgage payment without it.

I find I am particularly sensitive to cash flow, especially when compared to many entrepreneurs. My mother got it right when I was young when she bought me a sign that says: “Happiness is a positive cash flow”. While I deeply believe happiness is much more than a positive cash flow… it sure does help!

One of the best ways to sustainability and sanity is to temper wild cash fluctuations and stabilize cash flow. Here are 3 ways to do that.

How to increase & stabilize your cash flow

Change Payment Terms

Review payment terms you have with clients. Are you leaving significant portions of your cash flow up to the whims of your clients and hopeful projections of project milestones? This move is not about making it be “all about you” or shortchanging the client by any means. It simply more accurately aligns cash flow with the work you do and value you provide. If you always collected 50% at start and 50% at completion, how might your cash flow change if you collected 50% up front, 25% at a midpoint milestone and 25% at the end? This is just one example so play with the numbers and percentages. Consider adjusting your payment terms (due on receipt, 15 days, 30 days, etc.) as well.

Need a confidence boost that this line of thinking is acceptable? Consider the construction industry where they get paid 90% before work is complete (with only a 10% holdback). Some service providers require 100% up front.

Invoice More Frequently

Do you invoice monthly? Bi-monthly? Weekly? If you are doing hourly work for someone, when do you invoice for that work? I’ve recently been tinkering with this process in my own business. If I complete work the first week of the month, why should I wait until 5 (or more) days from the end of the month to see cash? That can be a 30+ day swing from completion to receipt of payment.

You want to strike a balance between the administrative activities and cash flow, but if you find yourself always waiting for the end of the month to come to solve your cash flow crunch, adjusting when and how you invoice and receive payment will help.

Branch Out (Subcontract Work, Retainers, and Other Collaborations)

I know part of the whole point of being self-employed is to not have to work for anyone else! However, what if you could preserve all that autonomy, create a learning opportunity, and create some consistent cash flow at the same time. Pretty sweet, right?

This avenue of income generation is like the dirty stepchild that no one talks about. Like somehow you are a “failure” if 100% of your income does not come from your primary work activities (which, according to some schools of thought better be your passion and soul’s calling as well). I’m all for listening to your soul and getting lit up with passion, but both of those things go into a deep dark place of desperation when you can’t pay your bills. I know what it feels like to hit that low.

What I’ve also discovered is that almost every single highly successful business person I have met – whether they are making six or seven figures (or multiples thereof) has derived a portion of their income, at least at some point, from these types of side activities.

Yes, I know, it came as a shock to me too…

So, if you need to generate more income or stabilize your income, know that there is no shame in exploring these avenues. In fact, sometimes they can be incredible learning opportunities and collaborations well beyond simply being an additional income stream.

Take Action

Give yourself the gift of getting very honest and specific about your cash flow and finances. Then, take action to improve it! Remember that financial stability, while rarely portrayed as such, is sexy.

Want to rest easier at night and still pursue your dreams? If so, contact me for a complimentary discovery session and get started today.





Scroll to Top