I didn’t fully understand how irregular business income can be until I transitioned to full-time self-employment. This is all the more evident to me now, with inflation at an all-time high; small business owners are struggling to cope with higher expenses and lower income. He are some valuable tips on how to manage these changing circumstances.

The first important issue to address is taxes. Although I’m not an attorney or an accountant, I am a small business owner with years of experience. Do not forget to save for your taxes! Unlike when you worked for an employer, as a small business owner, you are responsible for holding money for Uncle Sam. The tricky part, of course, is determining how much to set aside for taxes. I highly recommend you speak with an accountant to answer this question, although it’s usually between 25% and 30%. Creating your own “tax system“ is extremely important and will significantly reduce your stress.

But you need to be careful if your expenses are increasing and your income is waning; you may be tempted to borrow from the money you set aside for taxes. DON’T DO IT because once you do, it can quickly become a habit, and you will never catch up.

Another great strategy is to create an “emergency fund.” I have successfully used this strategy for my personal and business expenses. Set aside a separate pot of money for unexpected expenses; the more you put aside, the better. If you can start building that fund before you embark on self-employment, do it. It will make managing your business’s financial ups and downs much easier. If you don’t yet have an emergency fund, start one today! Every little bit helps, even if you have to do it for $10.00 at a time. And, if you need to tap into that fund for any reason, make sure you make it a priority to replenish it!

It’s also essential to review your expenses regularly. Make sure that what you are spending your money on is actually a priority for you. Upon review, you may find that you are paying money for things you don’t need. Go through your expenses line by line and ask yourself, “Do I really need this?“"Am I using this?” “Is this a priority for me right now?” “Does it have value for my business, and is it necessary for me to keep it?" If the answer to any of these questions is no, get rid of whatever it is. Redirect those funds to more useful places, i.e., your emergency fund, training, or new equipment.

Now, let’s shift the focus and discuss ways to increase your income. There are only two ways to do this: earn more and spend less. No big secret, right?

The first thing to do is create passive income, which doesn’t have to be high amounts of money. That would be nice, but your ultimate goal should be to start with little passive income streams, which can add up over time. Create a welcome email sequence for your lead magnets that don’t just nurture your new subscribers but will actually sell them something.

Another passive income idea is to create a resource page for your website visitors. This will take them to tools and software you use and courses you recommend. Put all those links on a resource page with your affiliate links, and share those affiliate links, as commissions can add up quickly. Each link can also take your customer to another link with additional products and services that you sell. This is how to generate that passive income! As your audience grows, so will your streams of income.

It is also important for a self-employed business owner to generate cash on demand. You can email about a special sale or course offering to generate quick cash. Can you teach a course or offer a low-cost workshop? Ask yourself, what do I have to sell, and who can I sell it to?

Lastly, a very important thing to remember is that you should always be planting seeds for the future so you don’t feel like you are constantly in a race to keep up. Work on projects that might not immediately put money in your pocket but will be profitable down the road. Spend a few hours each week emailing your list, promoting your leads, writing a blog post, or recording a podcast.

I hope you find these tips on dealing with irregular business income helpful as you strive for success as a personal-brand business owner. And I’d like to know how you are handling these tough economic times. How has your business been impacted? What are your strategies for increasing sales and keeping your income steady?

Here is a link to another post: Is Your Small Business Experiencing Cash Flow Problems?

Please comment below or send me an email. I would love to hear your opinion.