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How to Manage Money Without a Steady Income

stabalize your cash flow

(Image in this post from stock.xchng)

BIGG success is life on your own terms. One of the things which may keep you from living that life is not having enough money when you need it.

It’s one thing if you have a regular salary. However, you may be one of an increasing number of people who don’t have a steady income. It fluctuates from month to month.

Are you a salesperson working on commission?

Are you a business owner who doesn’t draw a regular paycheck?

Perhaps you’re a freelancer or solo entrepreneur?

[George] I certainly can relate to this subject, having been a business owner for pretty much all of my adult life. Come to think of it, before I went into business for myself, I worked on commission as a sales person so I’ve seen both sides of it.

[Mary-Lynn] Of course, with George, I now am a business owner too.

[George] Welcome to the club, Mary-Lynn!

[Mary-Lynn] I left a job in the corporate world with a regular paycheck, but I sure understand now what it’s like not to have that. I know I’m not alone. A number of people in our community have mentioned this as a major challenge to living their lives on their own terms.

So what can you do if your income fluctuates from month-to-month?

Understand your cycles

[George] One thing that I found is that I had to understand my cycles. I’ve struggled with this one. When I wasn’t busy, I’d spend time and money promoting and prospecting. Then I would get too busy – I didn’t have time to promote and prospect. So I stopped doing it. And before long, I wasn’t busy again and the cycle would start over!

Establish a baseline

Marketing has a cumulative effect. Today’s activities build on yesterday’s outreach, which build on the things done the day before that.

You create a consistent money flow with

a consistent flow of marketing activities.

Start by establishing a baseline. What can you do every week?

For example, it may be as simple as sending out five e-mails every week to prospective customers. Not the kind of e-mails we all hate getting. We’re talking about personal e-mails based on research and previous conversations.

Now that wasn’t so hard, was it? But we’re not quite through yet. Plan to follow-up with a phone call to these people in the next week. Only don’t just plan to do it; do it!

Activity

Week 1

Week 2

Week 3

Week 4

E-mails

5

5

5

5

Phone calls

5

5

5

So during Week 1, you’re going to send out five e-mails. Starting in Week 2, you’re going to e-mail five people and make five follow-up phone calls every week.

That’s your baseline. Commit to it.

If you have more time, you can do more. But the key is to try something to see if it works over a period of 90 days or so.

If it does, keep doing it. If not, try something else which requires the amount of time you can commit every single week.

Of course, e-mail and phone calls may not be the best way for you to reach out to prospects and customers. Find out what your highest value activities are and then follow a similar plan.

If you can be consistent with your most important activities – those things that generate the most income for you – you should be able to smooth out your inflows and make even more money!

Aggregate your activities

We have learned that there’s friction between activities. So we stopped jumping back and forth between production, marketing, and other areas of our business.

We put on a hat and leave it on for a while. For example, the early part of our week is dedicated to production. So we’re not e-mailing prospects on Monday. We’re cranking out the work we need to get done.

The latter part of our week is for marketing. We reach out to prospects and customers when they’re likely to be in a better mood.

Of course, we post to our social media accounts every day. But the one-on-one outreach is reserved for later in the week.

Of course, it doesn’t always go as planned. We have to be available when our clients need us.

But we have found that we are both more efficient and effective by aggregating our activities as much as possible.

Form coalitions

We hear a lot about collaboration these days. We like the idea of forming coalitions even better.

There’s a reason we make this semantic distinction. To us, collaboration tends to imply an in-and-out relationship.

You may work with someone on a project and then it’s over. Down the road, you may work together again.

A coalition is always on. We know what our coalition partners can do. We know what they’re looking for. So we constantly have our eyes and ears open to opportunities for them. They do the same for us.

At a given point in time, they may not be busy. So they’re doing more marketing. We get to ride along. At other times, the reverse is true. So:

  • Look for coalition partners who want to attract the same customers as you.
  • Narrow the list by making sure their values are the same as yours.
  • Then refine the list further by selecting those people who complement your offerings.

Stabilize your outflows

Risk is often measured by volatility. So by definition, if you have irregular inflows, you are taking more risk.

For that reason, strive for less risk in your outflows. Here’s the good news:

You have way more control over your outflows than you do your inflows.

We keep our standard of living relatively low. Since our businesses are still young, we watch what we spend and live frugally. For example, we watch how much we shop and go out to eat less than we did when our incomes were more regular.

One of our newsletter subscribers, Randy, says he’s been “rowing his own boat” for about 25 years now. He’s put his two sons through college while remaining debt free. He did it by having a plan when his boys were just babies. That plan paid off. He just turned 50 and plans on living on his own terms from here on out.

Congratulations Randy and thanks for sharing your story with us!

Randy’s story also helps us understand a second part of stabilizing our inflows:

Be very, very careful with debt.

Resist the urge to pile onto your outflows by adding principal and interest payments. It puts even more pressure on your inflows and more stress on you because you have to earn even more.

What do you suggest?

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