A bit of a continuation of the post on ‘Architect as Roller-Coaster Driver’ and the series on stuff they don’t teach at architecture school is that a. as a small business you go through periods of feast or famine; that is when all you seem to be doing is sending out invoices (which hopefully get paid) and the next minute either doing a stack of work before getting paid or praying for some work to come in.
Which brings us neatly to the second bit of the post heading: “Cashflow is king”. A well known phrase but what it means is that the cashflow in your business needs to be such that you can even out the feasts or famines.
Now there are three things that affect cashflow and can cripple your fledgling business:
1. Office accommodation
Renting an office is a big expense and for me it’s one that doesn’t make sense. I don’t really want people coming of the street and as a sole-trader I can work just as well from my purpose-built studio at my house.
Staff wages make a big dent in your cashflow and there’s a careful financial equation that needs to be made on net income vs staff expenses.
If there’s one thing guaranteed to make your money disappear fast is spending money trying to chase it with ill informed and badly put together, inappropriately timed leaflets, brochures and marketing stuff. Sometimes in business it’s best just to sit tight, batten down the hatches and just get smart with how you’re going to spend your hard earned £,$ or €.
There you go, a little bit of business advice from someone who’s been around the block a few times, had bigger offices and is now working ‘smart’. Comments as always welcome…