Many business owners run their operations completely blind, relying solely on their bank balance to gauge success. In this episode, financial consultant and coach Lorna Smith breaks down the reality of managing business finances. We discuss why you need at least a three-month cash runway, how to handle clients who demand 90-day payment terms, and why looking forward at your cash flow is critical for survival. Lorna also shares her transition from corporate banking to solo consulting, highlighting the importance of peer networks to combat isolation and the costly mistakes small businesses make when they ignore their expenses.

Episode Chapters

[00:00:00] Why you shouldn't cut marketing costs

[00:00:32] Introducing Lorna Smith: Consultancy vs. Coaching

[00:01:55] Determining your top and bottom-line goals

[00:03:59] Why you need a three-month financial runway

[00:07:28] Setting up correct financial systems early

[00:09:34] The dangers of late invoicing and 90-day payment terms

[00:15:00] Why you cannot rely solely on bank balances

[00:16:49] The difference between consulting and coaching

[00:30:30] Changing business owner mindsets around numbers

[00:34:30] Advice for businesses facing financial distress

[00:37:37] Holding yourself accountable as a solo founder

[00:40:47] Networking in Berkhamsted and St Albans

[00:42:30] Final advice: Look forwards, not backwards

Key Takeaways

• Secure upfront deposits: Stop acting as a bank for your clients. Always take a deposit to cover the initial costs of a project, especially when dealing with long 60 or 90-day payment terms.
• Look forward, not backward: Stop making decisions based purely on historic numbers or a quick glance at your current bank balance. Build a forward-looking cash flow forecast to accurately plan for the future.
• Review internal expenses: Small oversights, like unmonitored overtime or poor expense policies, can drain a business for years. Audit your payroll and expenses regularly to ensure you aren't quietly leaking money.

Guest Links:

• Loran Smith Website https://www.ljselite.co.uk/
• Lorna Smith on LinkedIn https://www.linkedin.com/in/lornacoach/

Resources:

• Xero (https://www.xero.com)
• QuickBooks (https://quickbooks.intuit.com)
• St Albans District Chamber of Commerce (https://www.stalbans-chamber.co.uk)

Host Links:

Ben Baldwin LinkedIn https://www.linkedin.com/in/benbaldwinchuffed/

Chuffed Productions LinkedIn | https://chuffed.video/

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