6 Money Hurdles in Business and When to Expect Them

August 27, 2012

Editor’s Note: This is a guest post by Tara Gentile.

Need to spend money to make money, right? While you hear this phrase a lot, there is an art to expenses. Closely monitoring how cash is flowing in & out of your bank account is one of the critical hurdles to leap over in business. The first thing to remember is that money hurdles aren’t necessarily negative.

Learning how to prepare for and anticipate expenses gives you valuable discipline to know exactly what you do and don’t need to operate your business efficiently. Planning, thoughtful consideration, and a sense of humor go a long way to seeing money hurdles in business as opportunities. Here are some of the most common money hurdles that I’ve experienced for myself and ones I see in the clients I work with:

Startup Costs

Whether your business is a $100 startup or requires an angel to get it off the ground, the very first money hurdle you’ll face is how to get your business started. Website, shopping cart, supplies, office, laptop… oh my!

I put my first few expenses on a personal credit. It was a total of $85 for a year of web hosting and a domain name. That was money I didn’t have at the time and it wouldn’t have been a stretch to think it was potentially burdening my family.

This hurdle seems difficult because it’s a gamble. You have no concrete proof that the money you’re spending will yield any kind of return. This is often when you receive the harshest criticism from friends & family, making the decision even more difficult.


The next hurdle you’ll face (and face… and face…) is what to charge for your work. Products, services, services that are products, products that are services – you can research and ask around (and you should) but essentially the first go ’round is a guess. Make it an educated one and then be prepared to maintain flexibility.

My hourly rate has increased 20 fold since I started my business nearly 4 years ago. My price increases were due to a better understanding of my business and my value, my growing experience & mastery, and the need to reduce my workload.

Growth Investment

At some point, you’ll need to output serious cash to make a big move forward in your business. This might mean acquiring a competitor. But it mould be as straightforward as a brand new piece of equipment, hiring your first employee, landing a big piece of advertising, or funding your travel to an industry event.

I’ve had almost every kind of growth investment! Just 6 months into my business, I purchased an existing business and took things into hyper speed. Six months later, I spent good money on all new technology. That’s about the same time I started using an independent contractor for tech & administrative work. 6 months later I started making investments in travel & in-person networking.

Each of these expenses were scary at the time but my kept my focus on the almost-a-given reward. It was always enough to keep me moving in the right direction.


For many successful business owners, taxes are a big surprise. Not because they’re ill informed or trying to cheat the government but because their own success comes back to bite them in the rear! Exponential business growth can mean a much larger than expected tax bill at the end of the year.

With my revenue more than doubling each of the first three years, I was quite surprised to find I jumped a tax bracket and owed more than I used to earn. It’s a good problem to have… But it’s a hurdle nonetheless.


When you’ve been bootstrapping your business from your savings account, jumping to credit can seem a scary proposition. Getting a loan (yep, done that) or fronting expenses on a credit card (that too) seems like a major jump backwards if you’ve been trying to stay debt-free in your personal life. The last 20 years, and rightly so, have seen a major backlash against consumer debt.

But debt in service of your business isn’t consumer debt. It’s business debt. Ideally, there is a direct relationship between the amount of debt you incur and the revenue you will bring in because of that debt. That’s not to say that business debt should be considered likely – or is even a foregone conclusion. There are many businesses where debt is not necessary. But there are also many scenarios where an ounce of debt equals a ton of revenue. That’s a good bet.

Bottom line, debt shouldn’t be off the table. It might be a decision that you continually say “no” to. But discounting it completely means you might miss out on a big payout down the line.

Cash Flow

Cash flow problems can come at all different phases of a business but happen most often in transition periods. Transitioning from a product to a service? Vice versa? Transitioning from small ticket items to higher investment offers? Transitioning from one niche to another? Yep, you can bet on cash flow problems.

Cash flow problems happen when the expenses & investments you need to run (and grow) your business outpace revenue. They happen in transitions because you often don’t have the information you need to effectively plan ahead. They also happen because you may need to front expenses during a transition that won’t be covered by revenue for a few months (or more).

How about you?

These are the money hurdles I’ve faced in my business thus far. And they’re common among my clients & colleagues.

What money hurdles have you overcome? What money hurdles are you preparing to leap over?


Tara Gentile is a business strategist for entrepreneurs making a difference through commerce in the You Economy. She’s also the co-founder & Lab Director of Kick Start Labs, a microbusiness incubator that teaches sound business principles through experimentation. No MBA required.

about the author

This is a guest post for the FreshBooks blog. FreshBooks is the #1 accounting software in the cloud designed to make billing painless for small businesses and their teams. Today, over 10 million small businesses use FreshBooks to effortlessly send professional looking invoices, organize expenses and track their billable time.

Freshly picked for you
Best Productivity Apps and Integrations in FreshBooks: 2019 Roundup New: Redesigned Time Tracking Experience How Long Should You Actually Keep Your Business Records?  How FreshBooks Select Helps Anna Save Money and Time When Scaling Her Franchise Now's the Time to Learn to Love Your General Ledger Key Performance Indicators (KPIs) You Should Track for Your Small Business
Sign up for the FreshBooks Blog Newsletter