Take a break or keep pushing forward?
For the entrepreneur, this decision is never an easy one.
Regardless of the circumstance or our general wellbeing, our default state is to keep pushing ahead.
When we do that, though, we’re not present to our state of being.
We don’t get to bring our full self to our work. We don’t get to contribute at the level we know we can contribute, and we don’t get to be contributed to either.
Taking a step back creates a space for others to step in.
And this is also a test of the structures you’ve set into place to this point. If your team isn’t big enough, or your systems are insufficient, others may not show up in the way you expect them to. But whether you’re prepared or not, this is something an entrepreneur should experience.
So, next time you’re faced with the hard choice of taking a break when you feel like you should push through whatever you might be facing, be in discovery of what it’s like to step back. Leave a space for others to step in.
And so, we arrive at a rather difficult subject.
Cash flow seems completely obvious and an easy field to navigate, only to entrepreneurs with no experience worth talking about.
“Earn more than you spend,” they say, which is not incorrect, but it doesn’t demonstrate a deep understanding of a potentially devastating issue, especially if you don’t constantly have your finger on the pulse of your career or business.
You can keep your project afloat so long as you have access to cash, but the moment that runs out, and your expenses exceed your revenue, it’s game over.
And it’s not always obvious how or why this happens. That’s the most challenging part.
I hope you never have to face that. But we know full well that even our heroes have gone through rejection and failure – in most cases, more than we even know!
So, while I don’t claim to have a foolproof method, here’s what I’ve learned about cash flow issues and how to solve them:
When Revenue isn’t Keeping Pace with Expenses
This is perhaps the most basic, most common cash flow problem (which doesn’t mean it’s easy to solve).
Even though your cumulative revenue is greater than your total expenses… because your expenses are piling up faster than your income, you’re having trouble meeting ongoing expenses.
As you can see, the plain logic of “earn more than you spend” isn’t going to apply here, and if anything, it’s going to stifle your efforts to resolve the issues at hand.
The solution here would be to control the flow of income and expenses. And, I’m not going to lie, some of this can be uncomfortable.
On the income side, invoice your clients early, take pre-orders, increase your rates, increase the frequency of purchases, and if possible, get paid upfront for your work.
On the expense side, negotiate with your suppliers and reduce the velocity or frequency of payments. Cut services you don’t need or find more affordable replacements. See if you can work out a bulk order deal or move to an annual plan instead of a monthly plan.
Rapid Growth Usually isn’t Sustainable or Profitable
We’ve already asked the question, “are you ready for a million streams?”
And the answer is if you don’t already have the right structures in place, you’re not.
Rapid growth seems like a dream come true, the very thing you’ve been waiting for your whole life. And yet, it can derail your project just as quickly as it can boost it. There’s a reason a lot of growing artists sign with a label.
Think about it. With rapid growth, you can be bombarded with emails and calls, customer support inquiries, media requests, bugs that need to be fixed (payment processing, refunds, overloaded servers), and more. And people generally expect these things to be resolved at the drop of a hat.
It’s one thing if you know how to handle growing demand. Quite another if you end up taking random stabs in the dark.
Rapid growth usually isn’t sustainable or profitable because you need to onboard and train new team members to meet the demand. Which isn’t to say you can always control growth, and that’s the troublesome part.
The only solution here is to educate yourself on the following before demand gets out of hand…
Leverage the Power of Structures & Systems
“I’ll just hire people once things get crazier,” said only the greenest of entrepreneurs.
One of your greatest expenses is bound to be team, and for good reason – they are just as much an asset as they are an expense.
But onboarding and training alone can be quite expensive, never mind the cost of turnover and having to replace departing team members.
Even the most experienced people are going to need direction, get a good sense of what you’re about, and have a clear understanding of your needs before they’re going to be 100% effective on your team.
The good news is that even small teams can be incredibly effective if they have the right structures and systems in place. In every enterprise, there are ongoing opportunities to eliminate, automate, and delegate.
With the right tools, you can systemize your operations to run more efficiently, and that means major savings.
But that doesn’t mean it’s going to be easy. I’ve interviewed some entrepreneurs who had to work evenings and weekends (on top of their regular workload) just to get their systems in place.
The good news is, whatever cash flow problems you might be facing, there are answers if you’re willing to go look foring them. And, sometimes, you will need to pay for good advice. That’s accurate thinking.
Quick reminder – you can now get The Music Entrepreneur Code – 2022 Edition (just in time for the holidays). Don’t get left behind – be the first to get my latest work into your hands!
We’ve already looked at structures and the positive snowball effect they can create in your music career.
But what do we do with structures that don’t work?
Should we sit around and cry about them? Go to a therapy session for failed entrepreneurs? Give up on all our hopes and dreams?
Something I learned from author Dr. Robert Anthony is this:
We’re always doing the best we can based on our present level of awareness.
I love that statement, because it tends to bypass our instinct to judge everything as right or wrong.
You are doing the best you can right now based on what you know, your skill level and experience, and the resources available to you. Can you accept that?
When a structure doesn’t work, it’s not a matter of morality, but a matter of integrity.
Look at the second definition of integrity. It should say something along the lines of:
The state of being whole and undivided.
What we’re talking about here is wholeness!
When a structure doesn’t work, it’s missing something. It’s not whole.
Sometimes, putting the right pieces in place will make the structure workable. At other times, it will be necessary to give up the structure and create a new one. Either way, though, we don’t want to get wrapped up in morality. A structure that doesn’t work isn’t bad or wrong, it’s just a structure that doesn’t work!
After years of putting my to-do list on a yellow legal pad, recently, I started creating my to-do list in Evernote again. I had no plans of moving over to Evernote, I didn’t think a digital system would even work for me, but that’s what has integrity in my life right now. I still need to prioritize, organize, and manage my digital to-do list, but everything is searchable, and nothing gets lost. That’s huge when you have as much to do as I do!
Structures are there to be optimized, to be changed, to be replaced. They’re there to serve you, not the other way around. So, don’t make it a matter of morality. Make it a matter of integrity.
I recently asked my friend, “are you ready for a million downloads of your new app?”
He looked at me wide-eyed, shook his head and said, “no way.”
Growth is exciting. It’s what we think we want. But a lot of the time, if we were to look at the structures we have in place, we’d see that we’re not quite ready for massive, rapid growth.
If you got a million streams today, would you be ready for the sudden influx of media requests, website traffic, merch sales, customer support emails, booking requests, and more? Because that’s what growth is going to look like.
And the answer for most artists looking to create that kind of success is simply “no.”
Whether it’s learning the ins and outs of enterprise level tools, hiring new team members, putting new structures in place, or otherwise, there are sure to be many steps and missteps in responding to explosive growth. Mistakes will be made, and they will be more public than if they were handled while no one was watching.
Growth isn’t the enemy. But there is such thing as sustainable growth, and that’s the ideal for most. It isn’t always possible. Sometimes, we’ll shrink when we feel like we should be growing. Sometimes, we’ll take big leaps when we don’t feel like we’re ready.
But growing a little bit at a time allows you to identify the bottlenecks and the structures you’ll need to put in place to meet growing demand. You’ll get to see what it feels like to have 100 people on your email list, and then 200, and then 500, and then 1,000, and so on.
The email list is just an example of an area where you might be stretched, but you can probably see how 1,000 subscribers would feel like a different level of responsibility than 100 subscribers.
Growth is awesome. But it isn’t always easy, and it isn’t always what you need. Learn to appreciate and enjoy exactly where you are while keeping an eye on where you want to go.
My coach recently shared with me:
“You can have everything you want. You just need to put structures in place to get to where you want to go.”
And that really got me thinking…
I have structures in place for a lot of things I do, including the very guide you’re reading right now.
And then there are things that I don’t have structures for. Or, if I do have structures for them, but they’re not fully developed, or they’re too ambitious, or they’re not ambitious enough, or some combination thereof.
Obviously, there are limits to how much one person can do. But in a crisis situation, sometimes we are required to do considerably more than we ever thought we’d need to do.
What if one day you woke up to find you lost your primary source of income? This happened to me recently. And things like this can happen at any time.
What structures do you have in place for worst case scenarios?
Or, if you don’t have structures yet, what structures could you put in place?
Asking these questions helps us identify next actions. Working backwards from the result we want; we can determine the steps we’ll need to take to get there.
Things either don’t get done, or don’t get done efficiently when we aren’t present to the steps. We end up prolonging the journey unnecessarily or going down some rabbit trail that leads us far away from the path we originally wanted to be on.
“Ready, fire, aim” has its place. But when it comes to structures, it’s all about planning. So, plan your steps (daily or weekly actions). These steps form your structures.
And all steps should really be a hard “yes” or a hard “no.”
“Yes, these things are worth doing (because they get results).”
“No, these things aren’t worth doing (because they don’t get results).”
Put rules in place. These rules are also part of your structures.
You can have everything you want in life. You just need structures to make it a reality.
For a proven, step-by-step framework in cracking the code to independent music career success, and additional in-depth insights into making your passion sustainable and profitable, be sure to pick up my best-selling guide, The Music Entrepreneur Code.