This past August, I talked about individuals being in business for themselves, whether they planned this entrepreneurial venture or were self-employed in lieu of being unemployed. I want to continue the topic with some additional comments and suggestions because small entrepreneurial ventures (under four people) make up approximately 60% of the companies in business today, and planning and communication are critical to a company’s success.
After your company is up and operating, cashflow becomes a concern either because you started with no contracts and/or a backlog of work from past clients, or you have work and you anxiously await payments from the invoices you sent your clients. While this is going on, you will have already accrued expenses such as the cost for a business phone, office supplies, etc. Ideally, prior to setting out on this new venture you should have already established a financial plan to get you through those early months of work. If not, a financial strategy is needed to accommodate the cost of doing business and the usual time-lag between invoicing and receipt of payment.