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3 Cash Flow Strategies for Consultants & Service Providers

Updated: Mar 2, 2022

These simple steps will make a world of difference when it comes to your cash position.

You hear it a lot from us: Cash is King. And if that’s true, then your cash management strategy is Queen.

All too often, business owners respond to tight cash flow by looking for ways to increase sales. This may solve some issues in the early stages, but for established businesses, the quality of your cash flow will usually come down to the quality of your financial plan and the systems you use to execute it.

So what makes for a strong cash management system? Here are three great strategies for coaches, consultants, and other professional service providers.

1. Bill upfront for services and packages.

Many coaches and consultants are finally figuring this one out, but if you aren’t currently billing for services and projects upfront, you’re probably shooting yourself in the foot. You can read more about why up-front billing is an essential cash flow (and time!) management strategy, but for now, understand that the only cash you can bank on is the cash in your bank.

Of course, it may not always work to bill the full amount upfront. In certain cases, you are best off requiring a deposit before starting work, and from there, offer monthly payment plans or bill for milestones along the way. In any case, make sure that you’re always billing ahead of the work that’s being done – meaning you’re never billing in arrears for work you’ve already completed. You should also have a contract that informs clients that work will pause if payments fall behind. This simple shift alone can eliminate hundreds of hours of Accounts Receivable management and ensure you’re getting paid on time – without ever having to walk away from income for work you’ve already done.

2. Pay yourself first.

This is perhaps one of the hardest habits to change for most entrepreneurs because we’ve been groomed to build our businesses before taking our payouts. Especially in the early stages, many business owners are used to scraping by on what’s leftover, or worse, continuously putting more of their own money in to cover shortages. Don’t do this. Don’t reinvest every penny of your own pay into the company and wait for the day when revenues are up enough to finally take your cut. As revenues rise, so do expenses. This is how so many who’ve fled the 9 to 5 world find themselves stuck in a new kind of rat race. It’s old-school thinking, and it’ll bankrupt your business and your morale.

Instead, get in the habit of taking your cut from the start – but do so wisely. Decide what percentage of your business income is for you personally and take it, fitting your expenses into what’s left. When your business gets paid, make the pre-determined cashout to yourself. Create a business budget that works on what remains.

3. Stack a “Rainy Day” or “Sink” Fund.

Even if you don’t anticipate a significant dip in income, you should always be prepared for one. Many people take a “spend it if it’s there” approach to cash management, which leaves little room for unexpected expenses or declines in revenue. Life happens, and financially savvy people not only accept this, they plan for it.

To set up your Rainy Day fund, first determine how much you need each month for normal business expenses, employee payroll, and your own compensation. Then, set your target reserves for 3-6 months of required cash flow. Once you’ve paid yourself from your revenues, take a chunk of what remains and set it aside for savings. When you have 3-6 months’ worth of expenses saved and you’re paying yourself what you need to make, you can expand the business budget or begin saving for capital improvements, new offerings, or other business investments.

If you’re running an established business, your cash position is almost always going to come down to how strategically you manage your business’s money. And because you now have so much at stake – personal investment, dedicated staff, loyal clients, and your company’s brand or reputation – you can’t leave your cash flow to chance.

If you aren’t already using the strategies outlined above, it’s time to make some changes. You can find plenty of tips and strategies on our website, and if you’re looking for support and guidance on how to implement strong cash management structures for your business, you can book a time to speak with us.


At the SLC Group, we offer all-in-one financial support services, from accounting and payroll to tax prep and Profit First implementation.

Got a pressing cash management question, or want to see us cover a specific topic on our blog? Drop us a line at and let us know!



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