Show Me the Money

All the advice that’s appeared in this column is worthless if you don’t manage your money well. Nobody goes into business wanting to hassle with the money side of the company. Entrepreneurs want to do what they’re good at, not crunch numbers. But when you start and run a business you must quickly come up to speed on many things. Sales, marketing, product improvement and distribution, IT, and much more. Now I’m telling you that managing your money is one of your most important roles. Get used to it.

Money Management 101
You’re in the business of making money, no matter your mission. Money management is the process of handling your business’s finances through budgeting, setting goals, tracking expenses and income, and investing. More than anything, you want to avoid the horror of negative cash flow! Negative cash flow means your business has more outgoing than incoming money. This is common with startups. It’s not sustainable over the long haul of course, so here are some tips to avoid it.

11 Tips for Staying on Top of Your Money

(1) Do Not Mingle Your Personal Funds and Your Business Funds. It’s critical to have a separate business bank account. Business bank statements are useful for tracking profitability, reconciling your books, and monitoring spending. Besides, the IRS isn’t going to like it if they ever knock on your door (and they will sooner or later).

(2) Watch Your Receivables. Piling up receivables is the Achilles’ heel of small busy businesses. It’s tempting to offer customers credit terms, especially when you’re new and hungry, or have close personal relationships with clients.

Sharks can sense when you’re too generous, and they will often push it to the limit. Many small companies end up with thousands of dollars uncollected, which gets harder and harder to get paid.

And, while we’re at it, bill for your work or products quickly. It sounds stupid, but some business owners are so overwhelmed, they put off their own billing! “Bill fast. Pay slow” is an old business adage. You can encourage payments by sending out invoices immediately, setting a due date, and notifying customers when they are late. If your business needs money earlier than the due date, you can offer an early payment discount.

(3) Accept Payment by Credit Cards Waiting for a check to arrive is annoying and anxiety producing. If you “require” payment in advance, or invoice a customer monthly, the ability to automatically receive payment by credit card can eliminate a common small business headache. Yes, you will pay a small percentage for the convenience, but you will make up for it in getting paid quickly. If you sell on the fly, consider getting a “square” to use with your phone. See a comparison of mobile swipers at

(4) Pay Your Vendors and Bills on Time. Want to earn a good reputation? Treat your vendors like you like to be treated. When you need a little flexibility, a vendor who trusts you will come through. Do you like to make collection calls? Neither do they. Credit card and loan payment late fees can add up. Frequently paying small late fees on vendor and other bills adds up, too. And then there are tax deadlines…Arg-g-g-g!

(5) Use a Business Accounting Software That Suits Your Business There are a bunch of apps that help you to track your money. Some even help you track hours if you need to show your client billable hours. PC Magazine has a wonderful comparison chart at The one thing that is critically important is to set your software up correctly when you start. You would be well served to hire a consultant and pay a few dollars to do this. You might also consider taking a class, since few of us are born with this skill.

(6) Go Lean. Try to avoid borrowing money if you can. Loans make for debt service, an extra expense putting pressure on your cash flow. Buy furniture and major equipment secondhand and go green to save money. Consider joining a coworking space with the idea to combine the independence of freelancing with the structure and community of a shared office space. Coworking spaces typically provide you with meeting space as well, pay as you go equipment and training events.

(7) Consider Trades. If you sell something desirable, and cash flow is an issue for you, consider trading your products or services for what you want. Usually trades work best for construction when demand is low, B2B services, or even ad media. You might find opportunities to do trades just by being open to the idea and suggesting it. (I just had my bathroom remodeled by a contactor client in trade for my marketing service.)

(8) Do it Yourself. There are numerous online resources to help you produce marketing materials such as Lucid Press FREE marketing templates of all kinds, including brochures, banners and fliers. Canva is another popular do it yourself graphic design platform at, and Vista Print can keep your printing costs under control Search for sites that can help you make your own videos, such as Powtoon There are too many such sites to list here.

(9) Explore Fiverr is an online marketplace for freelance services. Founded in 2010, the company is based in Tel Aviv, and provides a platform for freelancers to offer services to customers worldwide. As of 2012, over three million services were listed on You can find almost anything you’re looking for deeply discounted, sometimes for only $5, which is the genesis of the name. The most popular services are logo design, voice overs, animation, and blog posts, but there is much, much more.

(10) Create a Budget and Stick to it. With a good small business accounting software creating and sticking to a budget is much easier. Budgets make you think about reality and help you set expense and revenue projections. When you know how much you can spend, you can more easily manage your spending money. Once you’ve been in business for a while, this becomes second nature.

(11) Keep a Cash Reserve. It’s not a good idea to spend all your money and leave nothing in the bank. A little fall back fund will make you more confident in negotiations, and avoid you looking hungry (which is self-defeating). Much of small business is a confidence game where the winner is usually a good bluffer. Cash in reserve helps.

Vicki Garcia is the Co-Founder of Operation Vetrepreneur & President of Marketing Impressions, a 33+ -year- old marketing consulting firm.

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