Twelve years ago, Phil Cobucci founded BAM! as a “means to an end” when he lost his job.
Now, the digital marketing agency has worked on campaigns for companies and organizations nationwide as well as local small businesses and nonprofits. We sat down with Phil to chat about the growing pains that came with scaling up from a one-person shop to a full-service studio. Especially when it comes to cash flow management, Phil gave us some tips for independents looking to take their creative business to the next level. This conversation has been edited for context and clarity.
1. Make a budget to get an overview of your cash flow
I’ve always made it clear: This is not just Phil’s money — this is money that has to pay a salary. This is money that has to pay for health insurance. Computer rentals, software services. Employees who deserve a living wage. You need to sit down and actually make a budget to ensure that you have money for every piece of the puzzle, so that you’re providing excellent service to your clients.
I built a simple Excel sheet that broke down what I should charge clients at different tiers:
- What I could charge at a minimum
- What I could charge at the midrange
- What I could charge at the highest range
So I always knew what my bottom line was, and what I needed to do to ensure that I was making money at the end of the day. You don’t ever want to go into a project or any kind of business relationship and you’re already losing money on day one.
2. Save money as it comes in
Save, save, save! That’s the most important thing. The second most important thing is make sure you’re putting enough money away for taxes, depending on how your organization is set up. Whether you’re an LLC or you’re initially operating as a DBA or, you know, however you’re going to set up your company, especially as a solopreneur and then hiring people. Make sure you’re putting money away for taxes because it will bite you in the ass so quickly and you won’t even realize it until you get until you do your taxes or you see the bill.
3. Pick a bookkeeping software and stick with it
I made a lot of mistakes in the very beginning. I went from one software to another because I didn’t like how they changed, or the prices went up, or the company did something that got me angry. That was probably one of the worst mistakes I could have made. Look past that and stick with one company, unless you have someone who is going to assist you in the process of transitioning over. The only thing that was consistent for me was once I got to about year nine, I hired an accountant and I hired a bookkeeper to do the stuff on a monthly basis because it was too much for one person to manage.
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4. Make sure you know where every dollar is going
This was one of my biggest struggles early on. I originally built my business thinking it would be a means to an end. There were times I would put a business purchase on a personal credit card. And then it would be forgotten because I didn’t track it appropriately.
The same way the other way around, do not ever, ever, ever put personal expenses on your business credit cards. It’s a critical piece to success. Do not make excuses for personal things to become business expenses, because when it comes to tax season or business audits, those purchases will trip you up. Make sure you have a really good accountant and make sure you have a really good bookkeeper because they will save your life on an annual basis and on a monthly basis. They will ask you the hard question that sometimes you don’t even want to ask yourself, because you have to explain it on a paper with a paper trail. If you can’t, then there’s a problem, right?
5. Explore local, community resources for small business owners
I wish I had better business training prior to starting my business. Lean on resources offered wherever you are located. Some local governments have some kind of a small business support team or a local Small Business Administration representative who can help provide resources. How to start a business, how to run one. I live in Nashville, so I have the benefit of being in the state capital and an epicenter for the region, with great access to a Small Business Administration office. There are all sorts of different organizations that can help you make the appropriate connections so that you’re doing all of the right paperwork and running a business effectively.
Have you checked out the My Money page on Wethos Virtual Studios? Learn all about it to get started with better cash flow management. My Money is part of the Wethos Payments Stack, a whole new set of features focused on tracking money, calculating profit margins, and paying out teammates.