In the most recent episode of the Tech Bitch Podcast, I sat down with Shelah Barr, founder and owner of Happy House Massage and K-9 Cross Training. We talked about how starting a business is easy, but keeping one going is more challenging.
I myself have worked as a consultant on project and so I related to Shelah’s discussion on the challenges of pricing. It may seem like a lot of money when you first get your own check, but then you realize that you have to take taxes out of that, a self-employment tax, your own business insurance, healthcare, software and utilities costs as well. It adds up. And all of those small items need to be managed. Taxes usually have to be paid quarterly for businesses, which means that you need to be keeping track of your expenses and revenue to understand your net profit.
My only tip for managing your small business is to stay on top of your finances. I tried multiple solutions for time tracking and invoicing and for me the best one was Freshbooks.
Clients, especially tech clients, tend to make a habit of paying their bills late. In fact, one organization that I worked for would only pay half of their bills as a matter of principle. This damaged a lot of the relationships my team had with their small business vendors.
Cashflow is a huge issue, so ensuring that you’re billing on time and following up on invoices is imperative. I liked Freshbooks because I could track my time off of a project and add notes on what I worked on, which my client wanted reported back to her. And then I would just select the project and invoice it with a message to the client. I found that when I selected the invoice reminder tab for ping the client 7 days after the invoice was due and then again in another week adding on interest for late payments, suddenly the checks were coming at a much faster rate.
I recommend Freshbooks if you’re a sole proprietor like me who needs to keep track of services. I tried Quickbooks and I found the tool to be overkill, clunky and focused more on those that delivered goods. Add to that a really poor experience with their training team and a less than desirable customer service and it was absolutely not worth it for me.
Whatever tool you feel most comfortable with, do set aside a time each week on a certain day to take care of your business before it gets insurmountable and you find your cash flow getting less and less.
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