Financial Strategies for Navigating Cash Flow Challenges as a 7-Figure CEO

Heads up: We use affiliate links for our favorite products, softwares and companies. If you click and purchase, we may receive a small commission at no extra cost to you.

BIG success often comes with BIG challenges, but we know that you are probably quite familiar with the challenges that can come with running a 7-figure empire by now. You’re no stranger to the complexities of running a thriving enterprise, so let’s talk about how you can navigate what might be your biggest challenge in business.

Amid the extreme highs of scaling to become a million-dollar business, ONE obstacle often stands in every CEO's path at least once along their journey. In today’s blog, we’re talking all about cash flow. The lifeblood of your business and the fuel that keeps the machine running, understanding your cash flow and how to keep it smooth-sailing is a MUST for high-achieving entrepreneurs!

In this blog, we cover:

• Understanding the significance of payroll and its impact on cash flow.

• What does it mean to be a mission-driven business?

• What common cash flow issues you might be facing

• How fractional CFOs can provide clarity and guidance in managing cash flow.

• The benefits of cash flow projections and transparent financial management systems.

• Practical tips and actionable strategies to empower you in achieving smoother cash flow operations.

How Payroll Can Create Cash-Flow Stress

We’re just going to get straight to it and call out one of the BIGGEST stressors we see when it comes to your biz and cash flow and that is… (drumroll please!) Payroll.

Your payroll is probably one of the highest fees that you’ll have to pay out in your business, and more often than not this brings on a heavy weight of stress for CEOs. Maybe you've been in this boat before and you can relate when you start wondering things like:

• Can we afford this?

• What if our launch flops?

• What happens if we don't sell the right products?

• Are we going to be able to afford to pay not only the team but also myself?

If you are at the seven-figure stage in your business you are most likely an S-Corp, because of the tax savings that are available to this entity type. Typically, if you are an S-Corp, this means that you also have to be on payroll as the business owner, so you have that thrown into the mix as well.

Now let’s not overcomplicate this! You are running payroll for yourself and making sure that your team is taken care of, but you don't have to have a big team. I know so many seven-figure entrepreneurs with only one or two team members, so it doesn't have to be complicated, but the bottom line is that you are not just thinking about yourself when you get to this level.

Are You Running A Lifestyle-Driven Or A Mission-Driven Business?

I’ve noticed a clear difference between entrepreneurs who are in the newbie stage of their business and those who are well-established and more advanced. The difference between the two is what I like to call a lifestyle-driven business and a mission-driven business.

When you are in the early stages of business, you are usually thinking about things like what bills can I pay? What can I pay myself? What can I do to travel or do the things that I want to and enjoy my life as an entrepreneur, right? This is what I would call a lifestyle-driven business, where your business is really supporting your lifestyle, and this is great!

When you start to step into that next-level version of your business, it becomes what I call the mission-driven business, and that mission-driven business is really just geared towards a bigger picture. It’s not just about you anymore, it's about these team members that you're also putting food on their table, and you're making a bigger impact.

You have exactly what you need for your lifestyle and now it's beyond that. You're always taken care of, you don't have to stress, you don't have to hustle constantly, and you start to step into this different mindset of how much more can I let go of control?

Most CEOs in the seven-figure stage are willing to let go of control of everything and so when it comes to navigating those financial needs and the desires for the cash flow, it's about aligning your cash flow with how you want to feel in the business. At this point, we find that the women in that stage of business are looking at how can I make more of a mission with that while keeping our costs pretty low.

Where Is Your Cash Flow Getting Choked?

Most of the cash flow challenges that we see high-level CEOs facing revolve around managing their team and handling payroll obligations. As the backbone of any organization, your team is both your greatest asset and one of your most significant expenses. Ensuring you can cover payroll for your team members and yourself is one of the biggest stressors we see in terms of cash flow, so know that if this is on your mind, it is totally normal and you are NOT the only one facing these challenges!

Additionally, as you strive to scale your business, you may find yourself navigating the complexities of marketing and advertising expenses. Investing in promotional efforts to elevate your brand and reach new audiences is essential for scaling, but it can also become a substantial financial commitment.

Balancing the need to allocate resources towards marketing and ad spend with the imperative to maintain a healthy cash flow is a delicate tightrope walk for many high-level CEOs. These expenses are often seen as necessary investments to propel the business forward, but they can also place significant strain on your financial resources if not managed effectively. By addressing these challenges head-on and implementing strategic solutions, you can ensure that your cash flow remains robust and resilient as you continue to level up your business.

Lack Of Transparency Is Costing You Big Time

We hate to admit how often we see this with our clients, but we find that their prior bookkeeper would lump all of their money that they brought in into one account inside of their online accounting software. So all of the income was lumped into one bucket.

For example, they would lump everything into services or lump everything into program sales, or just sales in general. If this is how your books are being done, read on for why this is costing you!

If you’re bookkeeping is being done like this, you are missing out on some really high-value information. What this doesn't do for you is tell you exactly how much you’re bringing in per program, per service, or per product.

This lack of transparency in your books can create more of a cash flow issue because you don't even know where the money is being fueled from, right? So you might be spending a lot of money on ads, marketing, team costs, and all these different things for this one program, but you’re not realizing that this program isn’t what is bringing in the income that you want because you are not seeing this information in the transparency that your accounting software is giving you.

You Don’t Know What You’re Not Seeing

If you are someone who is scaling, you could be going into a situation where you’re not pricing things accordingly with the growth in mind with those next-level versions of yourself. When people at that stage are navigating these new changes in their seven-figure business it is really about taking a step back and understanding the depth of the information that your numbers are providing.

It’s being able to read the story your numbers are telling you and understand where the cash flow challenge is coming from. If you are trying to manage your own cash flow at this level you are way too close to home.

You might be thinking that every decision you make is the right decision versus when you bring in someone who's not in the day-to-day, like a fractional CFO, (that could be us!) to say no, it's not a good investment for you to take that mastermind or to be involved in that $30,000 purchase.

You need someone on your team who can hold the vision of the bigger picture, but can also get into the nitty-gritty details of the information and help you see clearly where the challenges are coming from and how you can strategize your way out of them.

Focus On The Long-Term Growth Of Your Business

You have to stay focused on the long-term growth plan for your business. One of the things we LOVE to do with our clients that really supports this long-term vision is by doing cash flow projections.

We can create a cash flow management system, as well as cash flow projections so that way we can project what your cash flow is going to look like for the long-term. We can see when you are expected to have a dip in income which could lead to cash flow challenges and we can be prepared for these challenges because we have the information that tells us when they are coming.

Projecting your cash flow allows you to have the transparency that you need in order to identify what we can do in the next couple of months that will help move things forward for your long-term growth without jeopardizing the company and running into major cash flow issues.

We all know by now that cash flow is the biggest reason why businesses fail and this happens because you don't have transparency in your books and the right information to truly understand and project your cash flow.

We're committed to empowering high-level entrepreneurs like you to navigate the complexities of cash flow with confidence and clarity by giving you transparency in your bookkeeping and becoming your trusted partner as a fractional CFO to guide you in making the best decisions for your business.

We’re not going to let your cash flow be something that creates any unnecessary stress because we know you’re already managing enough of that! We’re going to help you scale your mission-driven business by deeply understanding the intricacies and complexities of cash flow in a seven-figure business. Don’t wait to grab a free consultation with us, spots have been filling fast!

Related Posts