Remember in the old days how you had to report to a boss every day?
You had to show up at certain time, punch a clock when you entered your work place, when you ate, and when you left for home.
You had to dress a certain way determined by a dress code. Do extra work that you were never paid for and never received credit for doing. When you wanted a raise you felt like you were begging.
Those days are all gone now and you run your own home business. However, one other thing is gone – a steady paycheck. Whether it was a huge paycheck or a paltry amount, it was always consistent.
Now that you’re on your own, how do you deal with a fluctuating income?
Tips to deal with a Fluctuating Income:
Build a Cushion For Your Home Business
It is good idea to build a cushion before you go full time in your home business. The first couple of years will have a lot of ups and downs, so having the safety net of a saving account can be a huge help.
Lower Your Expenses
When you start your home business, try to lower you expenses as much as you can. If your spouse is working, try to live off one income and put your profits back into your business.
Keep Money Separate
Keep all your business and personal money separate. Get a checking account for business transactions. Save receipts for all your expenses so you won’t be paying extra income tax.
Track Which is Best Month For Your Business
You need to track which months are the best for you. This will help you in the future years.
If you find out the summer months are slow, you need to plan in advance. Put away some money you make in the good months to cover the slow months.
Never Stop Promoting Your Business
When your business is doing great, it’s easy to not spend time or money on promoting your business.
If you don’t continue to feed the funnel, you’ll run out of business, and then it may take some time to get new clients. So keep your promotional strategies going at all times.
Invest Your Profit Wisely
During the good years, don’t raise you standard of living right. You continue to invest in your business and set aside some profit to cover any unexpected expense that may arise.
Keep expense low as possible until you’ve been in business for a few years. It is better to make short term sacrifice so you can have long term financial freedom.
Create Multiple Stream Income
Think of other business ideas that might work during your slow months. If you’re a ghostwriter and you know no one orders projects during the Christmas holidays, then plan ahead and set up a blog in September to sell Christmas gifts.
Don’t rely on one income stream. Diversify your skills and other types of income so you will have consistent income coming in each month.
Find Ways to Make Recurring Income
Build a membership site or promote services that have monthly fee that pays you recurring monthly income.
Find customers or other home business owners who’ll pay a monthly fee for service that they uses. Then you’ll have recurring income coming in each month.
Start Two Saving Accounts
One is for your quarterly tax payments and one is for the monthly when income is down. This can also be your emergency fund.
Nothing is more frustrating than to your computer broke during a month when income is down. Plan for the inevitable by not spending spending all your income when the business is good.
Dealing with the fluctuating income of your own business can be tricky. But with some advance planning, you can survive the slow times and eventually thrive during both the ups and downs.