Evolve Resource
23 Cash Flow Secrets For Entrepreneurs
What business owner doesn’t want more cash flow? Yet, few entrepreneurs are really in the driver’s seat when it comes to managing cash flow. Cash is king! Without a steady stream of cash flow, your business will not succeed. Download this critical guide to improving your cash flow now!
- 1
Put Your Prices Up
Every business can raise their prices by 3-8% without customers noticing or caring. The only person concerned about this is you, the owner, so do it today.
- 2
Test and Measure All Your Numbers
What you measure improves. So ensure that all of your sales numbers, service numbers, financial reporting and analysis is being done and discussed for weak spots and opportunities regularly.
- 3
Improve Your Sales Conversion
Most companies get lots of leads in but don’t realize that improving their closing rate of prospects to paying customers is the easiest, cheapest and fastest way to grow cashflow.
- 4
Liquidate Old Inventory
Really looking at your inventory will uncover out dated products, old lines or items collecting dust that can be liquidated for extra cash. These items may not fetch a full price but even thirty cents on the dollar it releases trapped cash.
- 5
Reduce Inventory
Look at what inventory you carry and how much you move each week. Often just in time inventory systems get bloated and over stocked so look to run the bare minimum without disrupting delivery to customers.
- 6
Increase Client Deposits
Are clients allowing you to finance sales? Often the cost of producing or fulfilling clients’ orders can be more than the deposit taken and so salesare robbing you of cash. Increase the deposits and get cash upfront.
- 7
Let Clients Pay Quarterly or Annually in Advance
Clients that have weekly and monthly transactions may provide much needed cash by paying for more in advance. For a small reduction in price, your clients will likely pre- pay for 3 months, 6 months or even a year of services in advance. Ask them.
- 8
Closed Door Sales Events
Sales events for your existing client base can often drive a furry of activity and sales. Dress it up with a closed door VIP event and let the exclusiveness of your event make it an opportunity not to be missed.
- 9
Change Your Terms – 30 to 7
Clients that have weekly and monthly transactions may provide much needed cash by paying for more in advance. For a small reduction in price, your clients will likely pre- pay for 3 months, 6 months or even a year of services in advance. Ask them.
- 10
Make Effective Collection Calls
Most people don’t know how to collect money. Your calls should be organized with details, get a specific d ate o f p ayment a nd a p ick up or delivery plan. Master these calls and always have cash when you need it.
- 11
Ship Direct from Suppliers
Reduce your inventory costs, your warehousing labor and your time to deliver all by organizing a shipping system direct from your suppliers to your customers.
- 12
Get Referrals
New customers referred to you become customers with less effort, don’t require as long a selling cycle and often buy more right from the start. Develop an effective and active referrals system.
- 13
Factor Your Receivables
Factoring your receivables is simply the sale of those receivables in exchange for cash today. If your customer simply don’t pay on time then sell those receivables to a third party so you have fast cash to keep growing. (Ensure your pricing accounts for the discounted sale amount you’ll receive using a factoring service).
- 14
Add On Sales
Retailers often call them Impulse purchases at the cash register. All companies have the ability to add on extra sales value to each of their orders in the form of supplies, refill, delivery, complimentary products, etc. Just think, “Would you like fries with that?”
- 15
Sell Other People’s Products
Whether you sell other companies products as an add on sale to your own or as a stand alone offer, these sales are often just a commission or fee without any additional work.
- 16
Extend Supplier Credit
Often your best suppliers can be your best source of cash flow support. Asking suppliers to extend your payment terms, to map them to your sales seasons and to defer payments at time can all be ways to ensure supplier improve your cash flow.
- 17
Generate PR for Your Business
A great story, a contribution to community or an exciting event can all be reasons to cover your company in traditional and social media. People buy from companies that stand out and do good deeds. Give people a reason to buy from you besides your price.
- 18
Add Warranty and Service Contracts
The adding of warranty options and future service contracts as part of an initial purchase are critical ways to increase the sale value and to increase cashflow because these extras tend to have great margins.
- 19
Package Offers
Move slow moving inventory with your best selling product, add in an extra unit with each sale, bundle four when you buy three. Make packages that move more product with each transaction.
- 20
Sell Off Assets
Taking a hard look at the assets of your business can open up opportunities to sell under utilized assets, places to lease instead of own and chances to simply liquidate unnecessary equipment and materials.
- 21
Sales Incentives for Everyone
Providing some form of sales incentive, sales contest and sales competition for short periods (1 week, 30 days, 2 months) often gets a team’s sales fire burning strong. They can push deals faster, bigger and with more enthusiasm in short bursts.
- 22
Ask Your Customers
Ask them, what could we offer to have you do more business with us? What else do you want to see us carry? Who else do you use and why? Good questions to customers will open up conversation AND opportunities for more sales and cash flow.
- 23
Factor Your Receivables
Factoring your receivables is simply the sale of those receivables in exchange for cash today. If your customer simply don’t pay on time then sell those receivables to a third party so you have fast cash to keep growing. (Ensure your pricing accounts for the discounted sale amount you’ll receive using a factoring service).
- Bonus
Plan Future Purchases and Appointments
Too often we move from individual sales transaction to the next one. Instead plan all of the purchases and needs of your clients for the next year or at least the next quarter. Tighten up sales gaps from every 6 weeks to 5 weeks and realize an 11% improvement in your sales.
