It’s a dirty secret:  Freelancers and entrepreneurs, even successful ones sometimes have cash crunches.  I’ve been cash starved due to the IRS, I’m something of an expert at surviving a cash crunch.  I’ve operated on a zero cash.  It’s stressful, aggravating and survivable.  The “hard part” is in my rear view.

Yesterday on her call, Sonia Simone touched on this reality. Hit home because I’ve lived it.  So many soloprenuers hide the fact that they are flat ass broke.  And it hit home because when you’re flat ass broke and don’t have a survival plan, you focus on yourself.  That’s how you become a “sales douche”.  When you focus on you, and all you can think about is your mortgage, you’re susceptible to all the fucked up things that adult failure spiral brings.

The crucible that I’ve gone through has enhanced my work habits, has made me a better business person.  It’s even made me more honest: I know I can survive a cash crunch and I’m now more immune to the cancer of scarcity thinking.  Once I’ve got those bastards free and clear (goal is end of January for all tax liability including 2009), you’ll see my empire grow.

So, here are ten things I’ve learned, and am still learning:

1. Stop Hiding It: People will figure it out anyway.  Manufacturing the appearance of riches, or even giving a shit about what other people think of your pocketbook was a mistake I made in 2005-2007 and it made things vastly worse for myself.  Don’t try to be someone you’re not.
2. Admit the cash crunch is your fault: I played the “victim of the IRS” card mentally for a long damn time.  I had a severe amount of Karmic Debt from life, and I deserved everything that happened to me.  It wasn’t till I embraced that idea that I started digging out.
3. LIFO for Bills Is Your Friend: LIFO means: last in first out.  It’s the way to get ahead of a cash crunch.  When you’re in “catch up” mode, you’ve gotta pay bills based on what’s shows up today, and work backwards.  This puts you back in reality land.   You stop pissing off new people.
4. Accounting Is Your Friend: I’m still shitty at accounting.  I’m getting better.  On my wall is a list of total debts, IRS debts, daily interest and goals.  I haven’t hit what I  wanted to, but without that I’d be further behind.  Accounting = Reality.  Embrace Reality, don’t prolong the misery.  You’ve gotta know three things:  monthly expenses (business and personal), your daily expenses (based on monthly/20) and your average daily income.  Peter Drucker says that anything you measure improves.  Measure your money.
5. Be Frigging Frugal: Look, if you’re in debt, it’s not time to let off steam at the church of St. Arbucks.  It’s not time for a $9 appeltini.  It’s frugal time.  For selfish reasons.  Go through your last 3 months bank statements.  Look at all purchases below $15 bucks. Add those up.  Chances are, 90% of that money could have been avoided.
6. Be Really Frigging Frugal: No holds Barred: We moved and cut expenses.  We cut cable, everything. We went all in on paying this debt monster, going down to one car, stopping the travel.   We sold possessions.  It’s not enough to be “kinda” frugal.  That’s a ruse.  Our housing cost and other costs were a nightmare.  Ego had us in a nice house we didn’t have the coin for.  Being able to move was a freeing experience.
7. Debt Sucks, Don’t Get More. Debt is slavery. Debt sours the way you feel about the entire world.  “Priceless?” That’s bullshit. It’s never good.  It puts off  what’s inevitable, and it masks the fact that you’re currently not good at business.  When you have debt, it’s the opposite of LIFO, it obscures how you’re doing.  Kill your debt.  (My timeframe for this is April of 2010).
8. Give More Value To Others & You’ll Be Just Fine: This is hard, but your net worth is generally a reflection of how much you’ve given minus how much you’ve consumed.  My net worth is still negative, (it’s getting better).   You figure out ways to give more to others.  Every day write down what you’re going to give.  Focus on others and God takes care of you.
9. Account For Your Time, Too: Figure out if you’re spending your time on  productive work.  If not, fix it.  Write down an ideal schedule in order.  For me, it’s not “at 9:30 I’ll be doing this,” but it’s “this repeating task, that one, then that one.”   Make sure you’re not constantly rechecking paypal and re-adding your bills up.
10. Get Over Anxiety: Johnny said there is no spoon.  Anxiety and scarcity makes you nuts.  When you’re nuts you focus inward, and nothing is more repulsive than a selfish flame-out.  Work for others, you’ll be fine. Money stress totally sucks. When you’re anxious about it it vibrates and people can tell.  They avoid you.  It’s hard to do, money-stress comes back sometimes, but you gotta remind yourself that you’ll be fine.  Focusing on helping others did it for me.

Anyway, I’ll trim this down to 860 words then hit publish.  You get the gist.

This post originally came from the Freelance Sales Blog GenuineChris.com My company is http://flatratewebjobs.com/ go check that out when you get a moment. .

10 Ways I Survived My Cash Crunch As a Freelancer (And You Can, Too)

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