Did you remember to pay yourself this month?

As a solopreneur, from a cash flow perspective it can make sense in the early days at least, not to pay yourself a regular income. Maybe you got into the habit of dipping into your business account as and when you needed some cash for your personal expenses?

As time goes on this gets less and less comfortable; after all, your personal living expenses are usually regular, right? Monthly mortgage or rent, food shop, petrol in the car and so on.... you know they are due, and when they are due. So to have no provision for them is a recipe for anxiety and sleepless nights, until the day you realise you actually resent the business that you started; you have become its slave.

It is understandable and a common problem for solopreneurs - let's be honest, it is much less scary to take £100 here and there, rather than £1000 out of your business in one hit. But the fact is that if you don't pay yourself a regular salary, you are likely to take too much when cash flow is good, and then when you hit a slow period, you don't have enough left for your bills. You start using credit cards just to "tide you over"...

To avoid the stress that "living out of the till" brings, try the following:

  • Set up a standing order to transfer a set amount each month from your business to your personal account, ideally to cover all your outgoings.

  • Consistency is your friend here, set an amount and stick to it, and if you see surplus building up in the business, try increasing your standing order. A business that can't pay it's most important employee (that's YOU by the way) is not a healthy business.

  • Ask a profit adviser to help you create your own profitable plan - and tame that cash monster for good.

Please email me if you have any questions or comments on this post

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