While entrepreneurs must overcome numerous challenges, the sense of freedom that comes with success often makes the struggle worth it. For many entrepreneurs, freedom means financial independence. However, what financial independence means can vary significantly from person to person. Entrepreneurs need to think hard about what financial independence means to them–whether it’s retirement stockpiles or unlimited cash potentials–and keep that goal in mind as they develop their businesses.
For the vast majority of business owners, freedom comes with a larger client base. Diversifying one’s client base ultimately leads to larger and steadier revenue. Codependence arises when entrepreneurs rely on a few key clients; when one of those clients leaves, the business can suffer and independence may be lost. A diversified client base mitigates this concern.
Payment terms can also limit freedom. Small businesses may find that customers pay their invoices at unpredictable times, which can leave them dependent on client payments to pay their own bills. When this becomes a problem, entrepreneurs need to create and enforce stricter payment terms that include late penalties. These policies can keep cash flowing more smoothly.