Money management: Tips for solo businesses
Recently I wrote a piece that generated quite a discussion. It was about a soloist who was uncomfortable with money. Here's a summary of your excellent money management tips.
I thought one of the most interesting points is this: money management issues don’t necessarily stem from a shortage of it.
While financial issues affect many of us, responses to A question of money showed money management challenges tend to come about as a consequence of attitude and behaviour.
Here are 10 other actions that came across:
1. Get your head straight
Many talked about the need to develop a money welcoming mindset, citing a fear of it as being at the root of problems. Paula Saltalamacchia from Melbourne summed it up perfectly:
“In what way do you value your expertise? In what way do you add value to your clients? In what way do you translate this from the onset? If you believe in your value and it is communicated wholeheartedly, payment will flow naturally. The more you hate anything to do with money or what it represents, the more experiences you will attract around it…”
Sage advice indeed, but adjusting one’s thinking is clearly not an overnight endeavour. Our article library has a couple of articles to assist, including Kath O’Sullivan’s Change your thinking and Ellen Jackson’s two-parter on getting to know your strong points.
2. Choose your customers
Time and time again soloists get into relationships with the wrong people and then wonder why things go wrong.
"Time and time again soloists get into relationships with the wrong people and then wonder why things go wrong."
If you’re not crystal clear on your ideal client you‘re inviting problems.
If you’re struggling on this front I can recommend Robyn Haydon’s article on Choosing the right customers.
3. Don’t get over-excited
The joy of securing a new business can result in a bypassing of procedures. I notice this is particularly prevalent when it comes to working with friends and family.
Get a system and stick to it every time.
4. Detail ‘value’ in proposals
As contributor Paul J. Morris discusses in Why was your proposal rejected? soloists must articulate value if we want others to pay for it.
Want more articles like this? Check out the financial management section.
5. Ensure you have clear terms & conditions
As Stephanie Rice from Cairns commented:
“…your terms and conditions reflect that you respect yourself and your business hence you are worthy of these terms. People ‘expect’ to pay for good service and professionalism, so respecting your own terms is a healthy mindset and allows you to carry the right energy when dealing with clients.”
A delightful side-effect of such documentation is you’ll rapidly feel more confident and able to do what Lisa Rutland from the Gold Coast suggests: “…have a forthright conversation about money as part of the initial briefing”
Imagine that – getting the topic out the way right up front.
6. Get a signature
Strictly speaking an extension of point 5, but it’s amazing how many times a purchase order or contract is created and never used.
7. Take a deposit
This may not suit everyone, but it’s certainly worth considering.
If you’re starting new work, or returning to a customer who’s stung you before, take the opportunity to raise the bar.
An advance payment sorts the wheat from the chaff and can set you on the road to a new way of working.
8. Handle discount conversations with confidence
If a customer asks for a reduction your response should be to look at what services you’ll omit.
If you choose to discount, show ‘special discount’ clearly on invoices alongside your full rate.
9. Pursue bad debts vigorously
With the right Terms and Conditions, the pursuit of bad debts becomes a procedure. Follow it.
Sue Hirst’s artice on Recovering money will help.
10. Embrace outsourcing
Peppered through the 70+ original comments on the question of money was the topic of outsourcing and there’s little doubt this can be a great option.
But selling the notion of value is something you’ll have to master for yourself.