Money / Financial management

Busy but broke: why don’t I have any money?

So you’re completely flat out yet have cash flow problems and never seem to have money in the bank. Where are you going wrong? Kelly Exeter has a few ideas (from experience).

3 January 2017 by

Seven years ago my graphic and web design business was growing at a mad rate. My three staff and I were all ‘head down, bum up’ from the time we entered the office right up to when we left each day and I was also working stupidly long hours on weekends to keep up.

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Yet we never seemed to have any money in the bank. Cash flow problems were ever-present and I spent a huge amount of time stressing about whether I’d be able to pay bills and wages each week.

"Like many people in service-based businesses, I was charging an hourly rate and the client only paid for the time we spent actually working on a job. "

Where were we going wrong? These three main places:

1. An unviable business model

Like many people in service-based businesses, we were charging an hourly rate and the client only paid for the time we spent actually working on a job. Not for the time spent:

  • Quoting and providing different options.
  • Answering questions (which is effectively consulting).
  • Going back and forth on email about proofs and changes.

Not only that …

You’ve probably heard this story about Picasso. While sketching on the street one day a woman recognised him and begged him to do her portrait. He completed it quickly, she asked how much and he said $5,000. “But it only took you five minutes!” she exclaimed, to which he replied “Madame, it took my entire life.”

Unlike Picasso, as we got more efficient at actually doing the work, we charged less. Sometimes a client would get a logo design from us for $200 because we managed to nail it in a couple of hours. Yet the only reason we were able to nail that logo design in such a small amount of time was because of our extensive briefing process (refined over several years) and our abilities as designers (also refined over several years). If we had poorer processes and took longer to come up with our designs, we could have charged more. Crazy!

How we fixed it: We changed our logo (and website) design pricing away from a ‘by-the-hour’ structure to a flat rate structure –  we started charging for value rather than hours. The flat rate covered the time we knew we’d spend going back and forth with a client regarding their requirements, the expertise we brought to the table (ie the ability to know which questions to even ask) and finally, the time we took, on average, to deliver a quality design.

2. No recurring income

In the very early days of the business I had several clients on retainer. They paid a flat rate every month and this covered all their design requirements. For the most part, it was a great arrangement for both them, and us. In some months, however, the workload from our retainer clients was so high it left little time to do work for ‘pay-as-you-go’ clients. So in the end, we moved everyone to the pay-as-you-go arrangement.

Big mistake.

Yes, having retainer style relationships with clients can mean that in certain months your workload explodes, but knowing there is a guaranteed sum of money coming into your bank account each month is worth the odd stressful month here and there.

How to fix it: Retainer style arrangements aren’t the only way to have recurring income. You can also run an evergreen online course, have monthly live events, write a book, create a membership site or develop some software-as-a-service (saas). No matter which way you decide to go, having recurring income coming into your business is essential for ensuring there is always money in the bank.

3. Bad invoicing systems

Boy oh boy – did I use to have some poor invoicing practices!

First of all, if something took me less than 15 minutes, I never charged for it. To me, it was a nice thing to do for my clients. Unfortunately, I quickly found myself spending whole days doing sub-15 minute jobs for a bunch of different people … and charging for none of that time.

Secondly I used to invoice once a month, at the end of the month. This meant if a job finished on 1 May, it wouldn’t be invoiced until 30 May. That’s 29 days without payment.

Thirdly we used to have 30 day payment terms. See that job that finished on 1 May? The client had until 30 June to pay it. So now it could be up to 60 odd days before receiving payment for that particular job. And that’s if the client paid on time. If they didn’t, it could get out to 90 days before we received payment because I didn’t have time to chase up unpaid invoices until the end of each month.

How to fix it: I go into more detail here but the major things we did were:

  1. Created a minimum job charge for jobs that took less than one hour.
  2. Started invoicing jobs as soon as they were finished.
  3. Shortened our payment terms from 30 days to 7 days. (Can you walk out of a restaurant without paying for your meal? No? Then it’s not reasonable to hand over artwork or a printed flyer to a client and then wait 30 days for payment.)
  4. Started sending payment reminders for invoices the day they crossed into ‘overdue’.
  5. Started taking a deposit for larger jobs.
  6. Created payment terms that applied to everyone (including friends).
  7. Communicated our payment terms very clearly to new clients; and the reasons for the change in terms very clearly to existing clients.


It’s very disheartening to be working your butt off day in, day out and not see this reflected in your bank account. I hope the above has provided you with some food for thought, and also some very practical ideas you can activate quick smart to help with any cash flow problems.

Got anything to add? Or have you found it difficult to implement the above? I’d love to hear about how you’ve resolved your cash flow problems in the comments below.

Kelly Exeter

is the Editor of Flying Solo and owner of Swish Design. She’s also an author and her most recent book 20 Simple Shortcuts to Small Business Success was written with fellow soloists and small business owners in mind. Connect with her on Facebook, Instagram and LinkedIn.


  • Excellent suggestions. I’ve recognised a lot of (1) and (2) in my own business. Now that the business is firmly established, it’s time for me to take another look at these things.

    • It takes a while to develop the confidence in ourselves to charge appropriately doesn’t it?

  • Loved this post Kelly! I’ve being feeling a bit like this, and I have finally starting talking to an advisor to make sure things are going to change! Love your blog x Thank you for another great post.

  • Great tips Kelly! I recently realised I was taking half as much time than I used to on a particular set of projects that I’ve been doing for years (at an hourly rate). There wasn’t the option of making it a flat rate because they charge it out to their client based on how many hours it takes me. So I simply told the client I’m working more efficiently now and will need to put my rates up. They were perfectly fine with this and suggested we review again in 2 months for another increase. Honesty about your abilities and the value you can provide is so important! It’s far more valuable to them that I stick around and we keep our current arrangement – so they want to make sure I’m happy too.

  • Peter Hornhardt

    i also moved to instant invoicing and a 7 day payment…and just for fun ( and not to sound “pushy” we had great results (even from large companies and govt departments) using the tag line ….”payment within 7 days will both please my bank manager and delight my spouse”.

  • This is perhaps the most succinct article I have seen on the subject, it speaks in real terms with the real emotion of a business owner who has learnt by experience, instead of overly massaged generic advice!

    What it makes me realise is that the business difficulties we often impose on ourselves aren’t necessarily unique, but a lot of us subject ourselves to them in the learning process!

    I particularly note:
    – Different rules for different customers (friends and family, hot referrals, big spenders for example)
    – failing to plan or collect deposits on large and / or time critical jobs
    – doing ‘small jobs’ without a minimum charge

    The bottom line is to be fair to yourself and your business – to do justice to the name you’ve earnt yourself. These common mistakes are distractions from this! I try to keep my business and mind running smoothly by asking myself “Who am I doing this job for?” Of course I am always doing it for the customer, but if I cannot answer for myself as well, it’s something my day can do without, and having the guts to say NO is far more rewarding than the crushing feeling of being drained emotionally and sometimes financially for a minimal benefit to someone else.

  • Great article Kelly. It’s funny but issues around debtors and collections come up with virtually every business I work with. Several of my clients have said that they intentionally steer clear of calling customers with overdue balances as they feel it might compromise the relationship. The point being that if you don’t value your business and your time enough to put in place the ideas you’ve listed in your article, why should your customer value your business or your time by paying you within terms?

  • Patrick O’Doherty

    Awesome post.

  • Thanks Kelly for some great tips and advice!

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