Smart Money Tip #7: Run Your Business Like a Business – Not a Cash Cow!

Today’s tip is specifically for women who own a business, are self employed or a commissioned based sales person.

One of the biggest mistakes I see so many female entrepreneurs do is they don’t treat their finances like a business. Time and time again, I run into women – many who have been in business for many years and often who are even making a lot of money who don’t respect their money and treat it like a business.

I call this being a Cash Cow.

A Cash Cow is a business person who:

  • Runs all their income through one checking account.
  • They normally don’t have a bookkeeper.
  • Wait till year end to tackle their bookkeeping for their CPA.
  • Rarely have the funds available to put into their retirement account.
  • Are scrambling to pay taxes at year end.
  • End up overwhelmed and miss out on so many deductions.
  • When they get a big sale or commission, they spend more – so they are not operating with a budget.
  • It’s always feast of famine – no cash cushion.
  • They often fund their business through personal credit cards.
  • They experience a lot of money drama.

If this sounds like you or someone you know, here are some smart cash flow tips you can implement immediately:

  1. Set up a separate business checking and savings account just for your business – even if you are a sole proprietor.
  2. Deposit all your business income into this account only.
  3. Create a budget so you know exactly what your business expenses are every month.
  4. Pay Yourself First!


Here’s how you will pay yourself first.  Every two weeks you cut 4 checks:

1. Your personal paycheck:

Identify how much you need to be paid as a paycheck to cover your personal expenses and pay that to yourself two times a month.

Tip: Even if you earn $10,000 per month, if you only need $3,000 per month to cover your personal expenses then cut yourself a check for $1500 twice a month.

The extra builds up in your business and then you can pay yourself a bonus quarterly!

2. Emergency Fund:

Send a check to your savings until you have a 3 month money cushion.

3. Retirement Fund:

Send a check to your savings account so you can fund your retirement plan – usually some sort of IRA. So you have the money when your CPA tells you how much you can contribute. More on this next week. If you goal is to fund $10,000, then you want to be sending a check for $384 every two weeks.

4. Estimated Tax Fund:

Send a check to your savings account to pay for your estimated taxes payments. Your CPA will tell you how much this is and give you the forms to send it.


If your goal is to have a successful business, to create wealth and to be able to sleep at night, then you need to schedule time right this minute in your calendar to sit down and address these cash flow techniques.

This will probably mean a meeting with your CPA to put your retirement and estimated tax payments on your radar screen. Meeting with a financial planner to set up a retirement plan if you don’t already have one in place and meeting with your banker to set up the appropriate business checking account.

And of course…. not being a cash cow.



Would you like to use this article in your E-Zine or Web site?  I would be honored just please be sure to include this complete blurb with it:

Katana Abbott is a certified financial planner, prosperity coach, speaker, author, host of radio show with over 100,000 subscribers, and founder of Smart Women’s Coaching – an on line global community of Smart Women who come together to learn, grow, and connect.  For more information about Katana visit her Website at




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