As a small business owner, the cash flow peaks and valleys add much more stress to your already stressful life. We’ve heard from many attorneys that cash flow issues are one of their biggest challenges, so we’d like to offer some tips on what we’ve learned as a small business that has helped us through our own cash flow rough spots.
1. Invest in Marketing
Shocking that a marketing company would put this as the first point, but hear us out. You’ve heard the saying that you have to spend money to make money, right? Well, this is where you spend that money. After all, if you’re not doing anything to market your firm and make people aware that you exist and can help, how are you going to bring in new business?
However, it’s important to do your research. Don’t throw a bunch of money at something and hope for the best. Talk to several people and marketing companies and figure out if their strategy aligns with your goals.
2. Launch a New Product/Service
Perhaps there’s something new you can offer to your existing clients that can generate some quick, one-time income. Perhaps a legal audit or “peace of mind” review can attract some clients and even lead to additional legal work. You may be tempted to add a whole new practice area to your firm, which is something we only recommend in the most dire of situations. Niching down and being the expert attorney at one or two practice areas is still the way to go, and adding more practice areas can look desperate and dilute your expert status in your other areas of law.
3. Trim Your Overhead
Take a look at your financial statements. Are there places you can cut back? For example, maybe there are apps with monthly subscriptions you’re not using that you can cancel. You can also try to renegotiate the monthly cost of some bigger expenses like your internet bill.
Another example could be meals you charge to your firm credit card. It may be time to start bringing lunch from home or finding some lower cost restaurants to order from.
4. Get a Line of Credit
Having a line of credit can actually bring you some peace of mind, knowing that you have money to pull from if you get into one of those cash flow valleys. However, it’s important to manage this credit and the rest of your debts carefully, as mismanagement can really kill your cash flow if it gets out of control.
No one said running a small business was easy, but keeping an eye on your finances and leveling out those cash flow peaks and valleys can make it a little less stressful.
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