I can relate… when I started my first company, I had -US$5k … I borrowed a $5,000 cash advance on my credit card! Wow, that was… ill-advised. But I made it… first, if I knew I had money coming in at the end of the week, I was happy. Then, the end of the month. Then, the end of the quarter.

Eventually, I figured out to (a) be personally debt-free (no revolving debt, no car loans. A mortgage was ok, but I purposely paid off my student loans as quickly as possible); and, (b) to keep a couple of months’ living expenses in my short-term savings so I could absorb the ups-and-downs.

Weirdly, as I close in on the end of my career, I am back in that same situation (divorce, lost my business, kids in university, emigrating)… cash flows are less predictable, and I rely on my short-term savings to provide a cushion.

Long-term, my recommendation remains the same as when I was young: minimize recurring expenses, have a fund to absorb the dips in income, and plan for the future (with savings for a house or other big investment, and a private pension fund).

Also – sell more!

I married a more risk averse woman.

We worked while she got a degree. Once she landed a great job I focused on making my own businesses while keeping my wage job.

The first month my business paid as much as my wage job I quit my job immediately and focused on my business.

Ups and downs for a while, but we were very comfy with her job. Then my job hit the jackpot during COVID and I made more in 2 years than she will in 15 at her STEM career.

Now I make less per year than when I had my job, but I saved up and I’m still paying half of all the bills while I look for the next thing.

I remember a friend who faced a similar situation. She ended up taking a part-time role in a field she loved and continued her projects on the side. It gave her stability and the freedom to be passionate without financial stress.

Consider building an emergency fund with the surplus from the good months. This way, you’ll have a safety net. It’s also worth revisiting the projects that aren’t doing well and see if they can be tweaked for better returns, or if that energy is better directed elsewhere.

If you’re 15k is more toward the norm you could consider a line of credit with your bank. They won’t give you much but smoothing this pattern is one of the main uses.

Just starting out you won’t get much.

Nobody can tell you what is best. Do what you think will make you happy.

I would say it might be a good idea to develop a nest egg of funds you can draw from during those 1k months. I try and keep at least 3 months of funds saved for my business, in case I hit a lean time.

It also seems like you at least need to have an idea of your average annual income and expenses so you can then plan and expand.

Have you considered diversifying even more or optimizing your most profitable projects? It’s all about balance. But if a stable job gives you peace of mind, there’s no shame in that!

Here’s my mindset for all the businesses I’ve owned: I didn’t start them to become wealthy, I started them them to get “healthy”. Healthy in this context means to earn enough money to live comfortably and be able to move through a life catastrophe successfully. Not to say I wouldn’t complain if I got wealthy, but “healthy” is my benchmark for success in business.

keep your personal costs low and your savings high

never, ever think on a month to month basis about money.

in my head i think about the worst case scenario and think how long i could sustain myself (e.g. oh i have enough in between savings and investments that i could be unemployed for x amount of years with no income and live)

I’ve been there, and it’s so tough! The rollercoaster of self-employment can be exhausting. For peace of mind, maybe consider a part-time job to ensure a steady base income?

Can definitely relate. Up until this point, I was all-in with my core business (agency). It was/is quite lucrative, but it’s not stable. Now, I’m trying to diversify in two main ways: a) skill diversification by learning a new skill (something I wanted to do for a long time), and b) revenue diversification by launching other companies (have launched two already). I don’t know where all this will lead me, but I sleep better at night, knowing that I don’t keep all my eggs in the same basket.

I don’t even have my own business, but I feel you, half my income comes from bonus. I make a lot at the end of the year, but paychecks are smaller than bonus so I hesitant to get a mortgage and loans.

I keep personal costs low and save so I can survive theough the bad times. Also I always try to have something other going on in my life that is not my job where I can see improvement and growth and try to focus on that when work sucks. Don’t make your business your whole life and personality.

I used to have this issue when husband was doing contracting for himself. I made a budget, and had one account for all the usual stuff/groceries/bills/payments etc. One account for “other” which was if anything came up. And I’d put the same amount in each. Then whatever was left over went into third account which was specifically for topping up account #1 and #2 to their set amount if ever there was a slow month.

All accounts grew over time. Some months would be less expensive with bills and groceries. Sometimes has prices would go down but my account #1 always had enough deposited every month to cover max amount of bills and groceries.

I have been self employed since college, over 30 years now. My occupation is very economically dependent, so I see great years and lousy years.

Currently, I have not worked for just over 12 months. I keep a budget, have no debt, and keep a rather large cash reserve for just these types of markets.

If you plan, you can really enjoy the ‘down time’.

Good luck