When you’re running your own business, cash doesn’t just sit in the bank waiting for you to spend it—it’s working. It’s fueling your operations, keeping your business alive and moving. Think of cash flow like fuel in your car: without enough of it, you’re not going anywhere.
Let’s break down why understanding and managing your cash flow is critical to business survival, and how you can avoid running on empty.
Not All the Money You Receive Is “Yours”
One of the biggest mindset shifts for small business owners—especially those coming from paid employment—is this:
Just because it lands in your business bank account doesn’t mean it’s yours to spend.
If You’re Employed…
When you’re working for someone else, your employer takes care of a lot for you:
- Tax is deducted before you’re paid.
- Your superannuation is automatically contributed.
- Work-related costs like rent, power, and vehicle expenses are all handled.
Whatever ends up in your bank account is your net income—free and clear to spend.
If You’re Self-Employed…
You are the employer. That means:
- You need to pay your own tax (income tax, GST, BAS).
- You’re responsible for your super.
- You cover the cost of everything that keeps the business running—tools, phones, fuel, staff wages, insurances, and more.
If you treat all incoming cash like take-home pay, you’ll quickly run into trouble.
The Fuel Tank Analogy
Think of your business income like fuel in a car’s tank.
If you spend it all on the weekend going fishing, you might feel great on Sunday—but come Monday morning, you’re stranded.
In business terms:
- If you spend all your income before setting aside money for expenses,
- Fail to pay tax instalments or supplier bills on time,
- Or can’t afford repairs or materials for the next job,
…you’ll hit empty—and your business will stall.
Practical Tips to Keep Cash Flowing
Here are some Finance Shed-approved tips to keep your fuel tank full and your engine running smoothly:
1. Separate Business and Personal Accounts
This is rule #1. Mixing the two creates confusion, messes up your bookkeeping, and leads to overspending.
2. Put Aside Your Tax Obligations
Use a second business savings account and:
- Set aside 15–30% of all income for income tax and GST.
- Consider quarterly BAS forecasts so you’re not caught off-guard.
3. Pay Yourself a “Wage”
Rather than dipping into business funds as needed, set up a weekly transfer to your personal account—just like a wage.
This helps you budget personally while maintaining cash discipline in the business.
4. Know Your Operating Costs
Understand your baseline: rent, equipment, phone, vehicle, insurances, software subscriptions—what does it actually cost to run your business per month?
Only once these are covered should you consider discretionary spending.
5. Keep a Buffer
Aim to maintain at least 1–2 months of operating expenses in a separate account as a safety net.
This “fuel reserve” keeps you covered during quiet periods, late invoices, or unexpected costs.
Common Pitfalls We See (and Fix)
At Finance Shed, we regularly help tradies and small business owners who:
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Burn through their funds in strong months and then scramble during slow ones.
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Take out loans or max out credit to cover ATO debts that could have been avoided.
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Can’t get finance because their Small business cash flow history is inconsistent.
We’re here to help you create structure—whether that’s through smart lending, vehicle finance, equipment upgrades, or just a financial health check.
You’re Not Alone—We’re in Your Shed
Running a business can feel overwhelming—but you don’t have to do it alone. At Finance Shed, we’re not just here to find you a small business loans. We’re here to help you understand how to build a solid financial base so your business grows steadily—not just from job to job.
So, before you spend all the cash on that shiny new ute or take an early holiday, ask yourself: “Is there enough fuel left to keep the business moving?”
Need help with your Small Business Cash Flow or thinking about a finance solution that fits your real-world needs?