Writing everything down by hand before making a significant financial decision is an underappreciated financial tactic that I firmly believe in. Sitting down with a pen and paper slows down and helps you think clearly, even though it may sound archaic. I used to scribble numbers on notepads late at night until they made sense when I first started Simply Noted. It made it easier for me to see where money was leaking and going. Although spreadsheets are fantastic, they can cause a sense of disengagement. You can feel the weight of every choice when you put it in writing. It is a straightforward habit that has repeatedly prevented me from acting rashly.
One underrated financial strategy I'd share is paying yourself a "steady salary" even when income is unpredictable. Early on, I used to pull money from the business whenever I needed it, which made cash flow a mess. Once I started giving myself a fixed, reasonable monthly paycheck, two things happened — the business felt more stable, and I became way more disciplined about spending. It sounds boring, but that habit forces you to treat your business like a real company, not an ATM. It also helps you plan better, both personally and professionally, because you know exactly what's coming in for you each month.
One underrated financial strategy I wish more entrepreneurs paid attention to is negotiating payment terms just as carefully as project scope. Early in my career, I focused so much on closing deals that I accepted 60- or even 90-day payment terms without a second thought. It looked fine on paper, but in reality, I was covering salaries and expenses while waiting months to get paid. Now, I always try to structure deals with milestone-based payments or at least partial upfront deposits. It keeps cash flow healthy and reduces that knot in your stomach when payroll is coming up. It's not glamorous advice, but getting paid on time can make or break your ability to grow without unnecessary stress.
A year ago, we saw a pattern that hurt our cash flow. Every time a major AI model went down, refund requests spiked. Some months, payouts wiped out our profit. It wasn't about users being unhappy - they just couldn't deliver their projects during outages. We decided to treat refunds as a cost of doing business. First, we calculated the average refund rate during outages - about 1.8% of revenue. Then we began setting aside 2% of monthly revenue in a separate account labeled "refund buffer." We didn't touch it unless we issued refunds. The change stabilized our cash flow. When the next outage hit, we refunded $7,000 in a day without stress or delays. No panic, no trust loss, and no damage to our margins. My advice would be: pre-fund your future problems before they show up. Best, Dario Ferrai Co-founder at All-in-One-AI.co Website: https://all-in-one-ai.co/ LinkedIn: https://www.linkedin.com/in/dario-ferrai/ Headshot: https://drive.google.com/file/d/1i3z0ZO9TCzMzXynyc37XF4ABoAuWLgnA/view?usp=sharing Bio: I'm a co-founder at all-in-one-AI.co. I build AI tooling and infrastructure with security-first development workflows and scaling LLM workload deployments.
Entrepreneurs who want a bigger tax write-off than a contribution to a 401(k) can offer should look at a Cash Balance Pension Plan. A hybrid plan permits the owner of a small business to create an annual "credit" that often amounts to $100 k to $300 k, much greater than the $66 k limit on a profit-sharing 401(k). Every dollar contributed decreases taxable income now and accumulates tax deferred until retirement. It's simple to establish. Someone else (an actuary or third-party administrator) designs the plan, you adopt it before your fiscal year's close, and you contribute the first one within the tax-filing deadline plus the 8-month window of time. The plan can layer over an existing 401(k), and even a firm with just 1 or 2 employees can make use of a formula that makes mandatory employee contributions feasible. Annual reviews are a requirement because the credit formula needs to continue making sense as income rises or falls. Combined with good cash-flow planning, this behind-the-scenes device can accelerate retirement savings while lowering today's tax bill.
Separating your income from your lifestyle. I know it's a bit cliche but this often gets overlooked by entrepeneurs I know, and I know because I have colleagues who share these types of problems with me and I see where the root of it coming from. The thing is, just because you're making more doesn't mean you should spend more especially in the early growth stages. Treat surplus income like dry powder: reinvest it into the business, build a buffer, or deploy it into assets that compound (not liabilities that impress). The entrepreneurs who win long-term are the ones who keep their burn rate humble while their earning power grows. It's not sexy, but discipline scales faster than flash.
An underrated financial strategy I recommend is always leaving room in your offer for negotiation--even if it's just a little. In my real estate business, I've found that giving myself a small margin, whether buying a property or hiring a contractor, often leads to creative deal-making or unexpected savings that wouldn't have happened if I'd set hard numbers from the start. It's a way to both protect your downside and leave space for potentially better terms, which adds up over time.
In my company, an early-pay discount yielded a higher return than a fund. We set "2/10, net 30" as our default investment, where material purchases are significant. Save 2% by paying 20 days in advance. This is a risk-free return of about 36% per year, and it compounds for all eligible invoices. Over the course of a year, the savings subtly reduced COGS and paid for a month's worth of payroll. Because we are the account that intentionally pays early, quarries and freight partners began giving us first pick on limited Carrara lots and better lanes as a side benefit of relationship equity. The inverse also helps when money is tight. To maintain float free of fees, we hold payment until day 29 if there is no discount. The discipline is straightforward: track windows in your AP, ask all vendors for early-pay options, and let your cash calendar, not your inbox, make the final decision.
The profit and loss accounts is what most business owners focus on, however, the real business health is reflected by its cash flow. The customer may be profitable on paper but fail to meet your bills on time or in cash in case of seasonal lows. I was taught this lesson the hard way as I was doing well back in my young years when we were getting many teacher training programs booked, but money was coming in months later and we had already invested in booking a venue, paying instructors and materials. I now have a 13 week rolling cash flow forecast that is updated weekly and this is just easier as we have been saved by this many times. I will be able to identify possible cash crunches or emergencies weeks before they happen and do something about it, be it in the form of renegotiating payment conditions with customers or negotiating more favorable conditions with suppliers, or making important purchases at a different time. My application of this is that I use it every Monday in the morning to look at our cash position and make projections based on the bookings I have already made, the payments I am waiting on and any other expenses that are planned. This gave us an opportunity to look into new markets without overstretching ourselves financially. This forecasting allowed us to switch to online programs during the pandemic without any financial issue. All that it takes is to be consistent and to be honest with your numbers as the forecast of your cash flow is your business compass that will indicate precisely which direction you are heading.
I tell every entrepreneur I mentor to stop focusing solely on price and start focusing on solving the other party's problems, because that's where the real value is. In my business, we often find that sellers facing unique challenges care more about a guaranteed, fast closing with no strings attached than they do about squeezing out every last dollar. By structuring deals that prioritize their need for simplicity and speed, we create win-win scenarios that a purely numbers-driven approach would completely miss.
One of the most efficient methods that I have used to reinforce our cash flow at Proximity Plumbing has been negotiating payment terms. We reversed the flow of money in and out our business so that we could be stable and have space to develop without external funding. In plumbing, the cash flow can fluctuate rapidly with huge supplier bills usually coming in before clients can pay the bills. At that, I was aware of how to make our payments flow more smoothly. I did it by requesting the suppliers to offer 45-day terms rather than 30 that would provide us with an additional two weeks before the payment was required. Meanwhile, I provided the clients with a 3% discount when they paid their invoices within 7 days. This encouraged a large number of them to pay upfront and this gave us more room on our outgoing cost. Due to that, thousands of dollars began to flow into our account weeks ago as supplier payments began flowing out. This enabled us to meet the wages, materials and necessary repairs without using credit.
I tell every entrepreneur that knowing your numbers inside and out, specifically your cost per acquisition, is an underrated financial strategy. In my business at Speedy Sale Home Buyers, if I know it costs me, say, $15,000 in marketing and operational expenses to acquire one profitable property, that clarity allows me to precisely allocate resources and forecast deals. Without this, you're just guessing, and guesswork won't scale your business efficiently.
Scenario-based cash flow forecasting is an underappreciated financial tactic that I suggest to business owners. Businesses rarely move in a straight line, but most people concentrate on a single set of projections. You can foresee problems and make better decisions before they become emergencies by creating three cash flow models: the best case, base case, and worst case. This approach has been extremely helpful to me in my work advising businesses from inception to initial public offerings and acquisitions. We use this strategy at OSSIO to make sure we're ready for changes in the market, adjustments to regulations, or even faster-than-anticipated growth. It enables us to more strategically allocate resources and reassures investors that we have put our financial plan through a rigorous test.
Drawing from my 30 years in community development before real estate, I see building trust as a direct financial strategy. Instead of focusing solely on traditional marketing spend, I invest my time and resources into truly supporting local causes and being a reliable advocate for families. This approach has consistently generated the most valuable off-market opportunities through word-of-mouth, creating a powerful referral engine that provides a far greater return than any ad campaign ever could.
What I think is currently underrated that many entrepreneurs, freelancers and small business owners commonly overlook is the Solo 401(k). People who have a side business are often entirely unaware that this option exists. This special retirement account allows you to contribute in two different capacities for your own one-man business. You contribute as the "employee" up to the annual limit which is $23,000 for 2024 and then contribute as the "employer" with up to 25 percent of your net business earnings. This structure of being able to contribute as an employee (not exceeding the annual limit) and then again as the employer gives you much higher savings for retirement than a standard IRA account. This is a powerful way to save for your future. And because any contributions you make will drastically lower your total taxable income for that year, this provides a huge opportunity for any business owner managing their own finances and who needs help saving for retirement.
Smart Structure Choice As a founder, my initial thought was justified: Save money using an LLC with C-Corp status. Then, I came to know that it was all about IP ownership. A clean IP and regular equity were only provided by a Delaware C-Corp structure. That made hiring overseas and raising money in the future all very easy to set in motion. For any founder, to meet the appropriate structure is not about saving money anymore. It provides a structure that supports ensuring investor trust, supports you in protecting your IP and assets, and enables you to readily scale your operations when opportunities arise.
Equity Over Debt People in e-commerce rarely ever think of equity swapping before debt. As an ecommerce business founder myself, I have seen that many founders rush into taking loans. But I encourage them to give a small stake to suppliers or partners for greater rewards. These people work very well once you make them sure that they own a piece of success, which means less cash out, quicker error detection, and so on. It's not about giving authority and complete control, but to build loyalty. In this way, cash flow continues to be strong, and your partners become true loyal allies to your growth.
Although it is overlooked, the power of reinvesting profits for growth is one financial strategy that is championed by every entrepreneur. It's easy to get caught up in the short term return potential of your profits and jobs are created by reinvesting profits in areas of your business that will provide sustainable growth for your business such as marketing, building better products and building a better team. At the end of the day no matter what you are doing your business doesn't simply survive, we created new future for your business. Reinvesting profits is what keeps your business running, if you are not reinvesting profits then you are simply coasting. By focusing on growth instead of short-term earnings, you will have a stronger foundation, be able to react to changes in the market and be momentum of constant growth. There is no faster way to add momentum than reinvesting profits back into the business and let your profits begin working for you.
President at World Trade Logistics, Inc. at World Trade Logistics, Inc.
Answered 20 days ago
My advice to entrepreneurs would be to build a large cash buffer, larger than the three months that business books or ChatGPT recomemend. If you can, aim for six months insted of three. Having that protective cushion has saved us more than once when we were sent curveballs.
One of the most overlooked strategies is to create a "sinking fund" to address predictable, yet irregular expenses, such as taxes, equipment replacement, or annual insurance premiums. Instead of freaking out whenever those large expenditures come around, you set aside a little each month in a separate account. I've seen this extend life with far less financial stress. One of the most overlooked strategies is to create a "sinking fund" to address predictable yet irregular expenses, such as taxes, equipment replacement, or annual insurance premiums. Instead of freaking out whenever those large expenditures come around, you set aside a little each month in a separate account.