3 Top Tips for Newly Self Employed
1) Manage your money daily Self-employment means that you no longer have that regular weekly or monthly pay cheque coming in, so money management is paramount to keep things balanced. Cash flow is the single biggest issue that small businesses (and sometimes larger ones) fail on – something in the region of 50% according to the UK Insolvency Helpline.
2) Keep an eye on cashflow
It has nothing to do with profitability. If all the money owed to you is added to the value of your stock, your financial position might look healthy – if you don’t have sufficient cash in the business to meet other demands, you could easily become insolvent.
3) Review the cashflow
Put together a cash flow for a fixed period. At the end of that period check to see how the figures compared to your forecast. If you have variances, consider what they are, what caused them – if you have longer term projects, you may want to ask customers for stage payments rather than having to wait right until the end before you get paid. If you have a good trading history, your bank may help, but they will be asking questions of you, so be prepared.