If you’ve been in business for any length of time, you know the feeling of a cash crunch. You’re busy working but, for whatever reason, the math just doesn’t add up this month. And you find yourself thinking about the mailbox a lot, hoping that it’s good to you today.
We’ve all been there and will likely be there again at some point in our freelance careers, but there are some things that we can do to make that dreaded cash crunch more bearable.
1. Know where you are. Truly.
No matter how organized (or disorganized) you are with your finances, take the time to figure out exactly where you are. Determine your cash on hand, what’s owed to you, immediate bills, etc. I’ve found that when financial stress piles on, I tend to yell that the sky is falling. Having the hard truth in front of you will help calm those nerves or at least equip you with the knowledge you need to find a way out.
2. Know what got you here.
Take a look at what caused your low cash flow. Was it a bad month of sales? Maybe a client that left you holding the bag? Or perhaps poor management of funds? Figure out the culprit and make a list of remedies that you can work on right now. The goal is to learn and move on. Don’t dwell on it and don’t beat yourself up; it’s the natural course of business sometimes.
3. Ask for a favor.
As horrifying as this might sound, have you asked your best clients for a favor? No, it’s not fun, but sometimes asking a client to push an invoice through can help alleviate some of your pain. Also, if you have a client that is past due, make that phone call. If they can’t pay in full, ask if they can at least give you a partial.
4. Don’t become paralyzed.
Sometimes stress can bring a business to a screeching halt, but you’ve got to keep moving. It’s time to suck it up and work on the projects you do have or you’ll find yourself in the same situation next month. The key is forward movement.
5. Don’t fly solo.
Maybe it’s ego or self pity. Whatever it is, we need to stop flying solo all the time. I’ve found that when the heat is on, I’m much better off talking to a colleague or adviser. Something about verbalizing the issue and asking for help does wonders for your personal and business growth. My advisers have a great way of reminding me how blessed I truly am and pushing me through the dips.
Know that you’re not alone. Know that many business people have dealt with the cash crunch before. Know that this too shall pass.
What about you? What have you done in your business to weather a cash crunch?
BTW: There’s a lot more about how to deal with difficult money situations in Ilise Benun’s new book, The Creative Professional’s Guide to Money. Pre-order it as a gift for yourself here.