Cash Flow Management – It’s a Learned Skill

One of the biggest challenges for every small business owner is management of cash flow.  Attorneys in business are no exception.

So, how do you do it?  How do you manage cash flow when sometimes there are more expenses at the end of the income?

It starts with awareness.

I always hit my financial objectives IF I knew what they were.

I remember how scary it was to run my business “paycheck to paycheck” so I’ve put together a few things I learned along the way.

1. Bring in more/consistent revenue – stop billing hourly, move to flat fee, and consider a recurring revenue based model. Look at how you can increase the value of each client you serve. Know the lifetime value of each client so you know what you can invest to acquire a client.

2. Recognize you are running a business and that requires investment to grow. Fortunately, in most cases and with the right knowledge, you are your best investment. Much better than the stock market.  Don’t reinvent the wheel. Invest in learning the shortcuts you can take from people who have been there and done what you want to do.

3.  Know your numbers – make sure your chart of accounts is set up well to produce the weekly/monthly reports you need to know if you are on track to meet your projections. Look at your numbers every day, if necessary.  Focus on what you want and then take the action steps to make that a reality.

4. Don’t stop marketing – look for ways to market your business every day that don’t cost much or anything at all. Do some marketing activity everyday and show the money Gods how serious you are about making money by being willing to do things that make you uncomfortable.

5. Know where the problem is and fix it. Is the problem getting your phone to ring? Getting prospects into the office once they do call? Or engaging once they get there? Solve the right problem.

6.  Worst case, manage your payables with open communication and not by hiding.  I used to think every bill had to be paid as soon as I received it, but they actually don’t as long as you are in active communication with your vendors. Don’t hide, just communicate.  Ask for longer payment terms.  Be honest and don’t be afraid to say, I’m having a hard time with cash flow and need help.  The worst thing you can do is just not pay and not communicate.  That’s where you get in trouble. And, what I know is that if you stop paying your bills and not communicating, it’s not long before you start seeing your clients stop paying their bills.

If you haven’t already downloaded my Law Business Manifesto and other practice resources, do so at http://www. LawBusinessRevolution.com.  Tell your friends.

I’ve been where you are and built a million dollar law business with the resources I give you there.

You CAN do this.

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