I love that coaching can be a two way street – learning for the client, learning for the coach.
The reason this statement made me sit up was that I know it’s true. No cash flow, no business.
If you’re going to have a successful coaching business you need to know your numbers. Not to the extent an accountant does, but sufficiently to allow your business to build and grow over time.
In my first year of business I focussed on generating revenue. I needed to test if I could sell my services. However I knew this could only be a temporary focus. After all “revenue is vanity, profit is sanity”.
In my business the second year is all about profit. It’s a different game to be honest, but an important one.
I was aware of costs last year, this year I’m even more aware of them!
It’s a fine balance as any business owner will describe.
Even a business like coaching with low over heads, can easily run out of cash if you’re not careful.
It’s a step by step process, and if I meet my profit target this year I will be able to begin to pay myself a regular salary. Next year the start up costs will have smoothed and I will be able to set clear budgets
Until then I keep my eye on numbers, because I believe avoiding the finances contributes significantly to a lack of cash flow.
Here are my top three tips for maintaining cash flow – let me know yours in the comments box below!
1. Set income targets for the year. Then break them down into monthly (and weekly if you choose!)
2. Stay super close to your numbers – I check mine every other day at the moment. Avoidance is a big cash flow killer!
3. Get into the habit of using an accountant early on. It won’t cost a lot, for example mine simply does my tax return annually, but they could save you money.
I use Xero to manage my accounts on a weekly basis, it’s a great system if you’re running your own business.
There’s another thought Ive just had on this, which is to focus on revenue generating work first. I think that’s a while blog so more on this next week!