Making money. Keeping the cash flowing to your business. These are real, tangible needs that all business owners deal with. Below you will find a series of concrete tips to help you get your cash flow under control moving in a positive direction. Before that though, there is something crucial you need to let sink in: The cornerstone of strong cash flow is a business owner who is in touch with their “why.” I have coached thousands of entrepreneurs to help them discover this core essence and sculpt their businesses around it to achieve ultimate success.
So, before you start running down this practical list of to-do items, check in with yourself and make sure the purpose behind your business creation is aligned with something inside of you that truly ignites your creativity. If so, great! If not, start there and get oriented before going on to these next steps.
Keeping the Cash Flowing
For small business, cash is king. You’re running your business, you’re expanding your operations, you’re making new hires, but a lot of small business owners have trouble maintaining their cash flow. This can affect everything from everyday operations to your ability to get a business loan.
Cash flow is the movement of money in and out of your business. The in flow comes from selling your goods and services, loans, lines of credit, etc. The out flow occurs during operations such as business expenditures, payments, business purchases and the like. When you run into a cash-flow problem, you are being asked to get present with what needs to change in your business. What do you need to add? What do you need to drop? What efforts and operations need to change? What’s working? What isn’t? What you really need now is some guidance on where to look and what to tweak to keep that steady cash flow coming. Here are some powerful tips to consider.
- Sell Your Offerings: This might seem obvious, but it is often overlooked. The best way to create cash flow is to get out there and sell what you’ve got to offer. It doesn’t cost you money and it helps you grow your business. Nothing else in business can propel you forward quite like having your back against the wall, so take that energy and flip it around, allowing it to launch you into your next sale! Dig deep, hone in on your “why,” and show the world what you’re made of.
- Don’t Put Anything Above Sales: A lot of entrepreneurs make this mistake. While it is certainly vital to build your brand, get your marketing right, make new hires and so on, if you’ve got to come up with $20,000 to stay in business, sales are what will get you there. Companies that are revenue focused don’t struggle with cash flow as much as others do. Stay on top of your numbers and maintain your key role as the Chief Convincing Officer. How much do you need to make this week? What is your conversion rate? In other words, how many people do you need to talk to in order to make a sale, and how many sales do you need? If it’s 10 people to 1 sale and you need 5 sales, you’ve got 50 people to talk to. Stay focused and make your numbers happen! Enlist the help of your team and make sure everyone understands the goal and their role in helping to achieve it.
- Make Appropriate Use of Loans: You can borrow money when you know you are going to have a good return on investment (ROI). For instance, you may need to order inventory at a low in-flow time in order to prepare for your busy season. If you know you will make the money back and then some when your busy season hits, a loan can enable you to secure the inventory you need to be prepared for your customers. Another example is during product manufacturing when you have higher upfront costs but the sale of your product will enable you to quickly and easily repay the loan. Many business owners automatically think debt is a bad thing. Debt can be a good thing when it enables growth at just the right time, increasing your earning potential way beyond the amount of the debt. You may get turned down by more than one lender before you find one who understands your business model, but don’t give up!
- Creative Promotions: When you find yourself in a cash-flow crunch, thinking outside the box can go a long way. Let’s say, for example, that you have clients whose payments are spread out over the year, but you need money now. You can create a promotion for those clients where they save money by paying up front. Many clients will take you up on it, as it saves them money in the long run. It benefits you both as you then have the money you need when you need it. Another idea is to have a flash sale: Put a product or service on sale for a very limited time and be sure to choose something that is not normally a sale product. Announce it to your list, promote it on your social media channels, etc. You could also opt to up your prices across the board and announce to your customers that you are giving them an opportunity to lock in the lower prices on goods and services for a limited time before the price change. This is a great impetus for people to make a purchase.
- Call Past Clients: Reach out to former clients and let them know about new opportunities. Just because someone has already worked with you once doesn’t mean they won’t want to again. In fact, the opposite is true! These are your best prospects, and they are also the most likely to refer you to others. Take the time to stay connected to your existing customers and watch the rewards roll in.
Image Credit: CC by thinkyourmoney.com