IT’S YOUR BUSINESS
advice for enterprising speakers
If you are busy with revenue- producing activities, you’re probably cutting back on your marketing time. And when your calendar clears, so does your bank account!
Here are five tactics for avoiding
the feast-or-famine cash cycle common
to speaking and consulting businesses.
1. Require a deposit.
Many speakers require a 50 percent
deposit when the booking is finalized.
This has the benefit of smoothing out
your cash flow. You’ll know the client
is serious before you remove that date
from your calendar, and you’ll have
upfront money to cover expenses for
travel and printing. And you’ll get
paid for all of your prep work.
2. Set and track booking goals.
Set a monthly goal that will result in
achieving your revenue goals. If you
consistently do the work to hit it, adequate revenue will follow. By having a
monthly booking goal, you’ll immediately see a problem if you’re speaking,
but not marketing. You will not have to
wait for the money to stop flowing to
remember your marketing efforts.
3. Open a separate checking account.
Treat your business as a separate entity.
Do not use personal checking accounts
or charge cards for business. Conversely, do not use business checking
accounts or charge cards for personal
use. This is not just about making it
easy to do your accounting at year-end.
It is about clarity.
You see the financial results
more clearly by
business activities separate.
4. Set aside
I put aside a
percentage of my
for taxes as the money rolls in. Get a
quick calculation based on last year’s
tax return to decide how much you
should put aside. By using top-line revenue, I do not have to get the accounting done before I can move this money
out of the flow and have it ready when
the check needs to be cut to the state
and federal governments. If you have
withholding out of your paycheck, take
that into consideration when you do
your calculation so that you are saving
the extra that will be due when you
have that break-through year.
Consider a savings account for large
expenditures that are not monthly. Add
up what you spend each year on insurance, continuing education (fees and
travel), equipment purchases and dues.
Divide by 12 and put that amount
aside. When the big bills come due,
you will the money to pay them.
If your cash flow fluctuates wildly,
set aside 10 percent of every deposit
for your liquidity pool. If there’s a slow
month, you’ll have available funds
at your fingertips.
5. Pay yourself a salary.
Whether you are a sole proprietor, an
LLC owner or a corporate shareholder,
pay yourself the same amount each
month. Pick a low enough amount that
you can pay it every month. When a
windfall comes in, don’t immediately
think about taking it out as a bonus. Let
it ride and consider what investment you
need to make in your business, your Web
presence, your marketing, or your professional development with that windfall.
Speakers who pay themselves varying
amounts each month often short themselves on the personal or the business
side. It is easy to disguise a business that
is not compensating you well for the effort, risk and talent you invest when you
are not taking a regular paycheck.
Linda Keith, CPA, CSP, is one
of only eight CPAs who is a
Certified Speaking Profes-
sional. She consults with fi-
nancial institutions and
speaks regularly on financial topics at con-
ferences. For more information, go to
Feast or Famine in the Checkbook?