Dear small business owner: it’s okay to have fluctuating income

And why, more than anything, it all comes down to trusting in our ability to make money...

Photo credit: Unsplash

As we head into the last stretch of this financial year in the UK (the first Monday of April is the start of the new financial year here for us) I’ve been looking over my numbers for this past tax year and realised that I’ve made around 12K less than I did the previous tax year.

I asked myself: should I be worried about this?

And my honest answer? Not at all.

Why not, you may be wondering?

1: This is my tenth year of entrepreneurship and my income has always fluctuated from year to year.

It’s normal and to be expected. Here’s my specific numbers from the past seven tax years to show this in action:

2023-2024 tax year: ~ 78K ($100K) (this is everything I’ve already earned this tax year and payment plans due before the first Monday of April - but it doesn’t include any other sales that may come through before the end of the tax year)

2022-2023 tax year: 90K ($115K)

2021-2022 tax year: 83K ($106K)

2020-2021 tax year: 42K ($54K)

2019-2020 tax year: 65K ($83K)

2018-2019 tax year: 80K ($102K)

2017-2018 tax year: 73K ($93K)

Did I freak out those two tax years in the middle when I took a bit of a pay cut? Not really - those years cover my pregnancy and maternity leave so I know why I chose to earn less those years and I can see that I recovered on the other side.

And also: it’s okay to earn less some years, for our income to fluctuate.

Our worth isn’t defined by how much we earn in our business. Perhaps you’re surprised by these numbers because you assumed that I earned more or perhaps you assumed that I earned less - but none of it really matters.

Our financial goals don’t have to exist in response to anyone else’s. True freedom comes from defining what enough looks like to us and shaping our business in a way that makes that enough number possible whilst also honouring how we want to live and work along the way too.

And the thing that brings me the most joy looking at those numbers from the past few years in my business is knowing that I’m making the same amount of money but by working less than half the amount of hours that I used to work - sometimes growth gets to look like creating more spaciousness and ease rather than chasing bigger money goals.

Also: this conversation with Amelia Hruby and Nicole Antoinette on Amelia’s podcast, Off The Grid, is a beautiful conversation about defining enough as a business owner.

2: I looked deeper at the data

There are two different financial numbers that I keep my eye on in my business: sales and cashflow.

When I looked deeper into the data of this past tax year in comparison to the one before what I actually saw was that sales were pretty similar, it’s just that cashflow was less for this past tax year as the percentage of people choosing to pay in a payment plan was much higher than the year before - very understandable considering the economic climate we’ve been navigating.

I did the same thing those years during my pregnancy and maternity leave when I earned significantly less - I recognised that I worked less those years and had less capacity to pour into my business so of course my income reflected that.

And if I looked at the data and did see that things were slowing down? My job would be to first and foremost not freak out. Because fluctuating income and non-linear growth is just part of the entrepreneurial journey. Who we are in the face of setbacks is just as important, if not more than, who we are in response to when things are going well.

3: What I earned was still more than enough

I have two enough numbers in my business.

My baseline enough number is what I need to earn to sustain my life and have enough to live, put a roof over our head, food on the table, cover my business expenses, and have a little left over for disposable spending too.

My core enough number covers everything above and leaves extra for savings and more disposable spending too.

These numbers can shift and evolve a little depending on my living costs and expenses but I find deep comfort in knowing what my baseline number is.

And to be fully transparent, when needed for cashflow I’ve leveraged savings or manageable debt in my business too.

4: I trust my entrepreneurial spirit

This is, ultimately, what it comes down to for me: I have to trust in my ability to make money.

My mantra is: if we’ve made money before we can make money again in our business.

And don’t get me wrong, I still spiral about money sometimes in my business. Especially as the main earner for my family in this season, I can feel a whole lot of responsibility on my shoulders financially. And I’m not naive enough to think that slower seasons will never happen again in my business - whether it’s because I’m choosing to slow down or things slow down even if I don’t want them to. That’s just the reality of being a business owner.

And as I said in a January episode of my podcast, every year of entrepreneurship is a leap of faith.

I share all of this today mostly to normalise having fluctuating income as a business owner and not tying our self worth to those numbers on our tax return each year too.

Running a small business is hard. Being a human being is hard.

But we’re here, figuring it out as best we can with the specific circumstances that we’re navigating this journey with, and for that we should be proud.

And my biggest encouragement? Don’t go it alone.

My business besties and the coaching programs and books and courses I’ve invested in over the years and the abundance of podcast episodes I’ve listened to, too - they’re why I’m still here a decade later.

I’ll say it again: it’s okay and so normal to have fluctuating income as a business owner.

So whether you’re having your best financial season yet, things are a little slow right now, or you’re somewhere in the middle just know that you’re not alone and that it’s all just part of this wild ride that we call entrepreneurship.

And if you ever want to dive deeper into what a simple, spacious, and thriving business looks like for you in a way that honours your humanness too? I have an awesome 3-part deep dive kit that’s 100% free for you to work through at whatever pace works best for you.

Until next time,

Jen