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There is nothing more exciting than choosing to venture out on your own and create a small business. It doesn’t matter whether you are offering a service that people can benefit from, or a new product on the market that’s going to generate you a big income, it’s going to be an adventure for you.
The one mistake that you can make as a business owner that is new to the game, is to put anything else before the cash flow of your company. Money talks, and without it you won’t be able to be successful. If you aren’t innovating, you need to be generating and this is a mantra that you should live by for the success of your company.
You need to build your brand and carve out a space for your company in your industry while at the same time bringing in as much cash as you can, which means you’re going to spend a lot of time ensuring that you have more coming into your business than you have going out. The reason this is so important is because at no point do you want to be left with debts exceeding what you can manage. Without cash in the bank, your business won’t last long!
Businesses use their income and cash flow to reinvest in their own companies, taking them to the top with bigger and better ideas. A lot of small businesses fail due to the lack of cash flow in their company, which isn’t what you want to hear as a newbie on the block, but it’s what you need to know if you hope to keep your company from failing. Understanding how the problems in cash flow occur can help you learn how to avoid making further mistakes. It’s also a way to ensure that your business is a success.
Keeping a percentage of your monthly revenue to one side can help you to achieve this, but if you aren’t pumping any money through your business, you won’t be able to achieve anything at all. Keeping the cash flowing through your company is going to take a lot of your time, but once you get the gears moving, you’ll be able to make your business run more smoothly than you can ever have imagined. We’ve got some great ways to keep your cash moving at all times within your business, meaning that you can feel secure that progress is going to continue to happen.
Knowledge Is Everything
When you decided to set up your business, you would have set up a business plan – possibly with the business advisers at your local bank – and you would have made lists of your expenses. This is everything from the money it costs to rent your office, to the cash you spend with companies like Freund Container on the right packaging for your products.
You’ll be fluent in the numbers from the beginning, because you would have spent enough time poring over the books to ensure that you are spending your business loans wisely from the get-go. If you are making changes over time, then you need to ensure that you know exactly where every penny of your company’s cash is going and how worth it those expenses are.
Offering discounts and coupons as a business is a great idea, but if you don’t know the numbers of how those discounts are going to affect your bottom line, then you are going to be putting yourself in hot water. Knowledge is power and it’s your job to know exactly where money in your company is being spent and whether it’s worth it. After all, reinvestment is necessary to progress, and if you are spending wrong you are going to be short on cash when the time comes to invest again.
Be All For Integration
Look at what it is your business is offering, then look at how you can make it better. Is it a service or a product that you offer? If you have a service that you bring to the table, a talent that can solve a problem, then you can add value to that service by doubling up. For example, if you build websites for companies from scratch, why not tack on a training course to teach staff of said companies how to use the website and how to upload blogs?
These training courses can get people interested in what you offer and earn you a little more of an income, making that cash flow you need less of an issue to achieve. If you are offering a product to customers, why not think about doubling up on the product?
So, if they buy a certain number of products, a discount could be given. This raises awareness about your company, makes customers more loyal as they feel they are getting something back from you, and it means that word will spread. Good feedback = good cash flow!
Add More To Your Service
To keep money moving through your business, you need to offer more to people. Offering a service is one thing, but you need to think about how your business is going to earn more from a customer rather than just be selling one thing at a time. So, once you’ve set up your product or service, look at the customer’s needs and go from there.
Adding in back-end services can really earn your company some cash, and this could be anything from charging for a blogging service after a website has been built, to charging a discounted rate for website building for the first two hours, then pushing the price up after that.
While it’s nice to be able to give the customers out there anything that they need, it should be remembered that you do run a business, and this means that a level of professionalism on your part is absolutely imperative. You should be competitive in your market, and you need to add more to what you offer to your customers so that they can buy more from you and recommend you to others.
Repeat Business, Repeat Business
We’ve said it twice to show you how important it is but repeat business could make or break your company. You are a customer to any business that isn’t your own, so to understand what people want you have to ask yourself what you want from a company that is selling you something. A volume-driven business such as retail relies on loyal customers and their repeat business as their bread and butter. If you wrong a customer at any time, a bad review is then made, which could influence the decisions of further buyers.
The key here is to ensure that you always put the customer first where possible. Your new customers are valuable, of course, but the better value will always be in the customers that return to your business on a weekly basis. For these customers, you need to give them further incentives to spend their money with you.
They already like what you have to offer, that’s obvious in the fact that they are coming back for more when it comes to your business. The reality is that if you want to get that repeat business over and over, you need to offer loyalty rewards and give those repeat customers a VIP status. Doing that can encourage people to come back to you over and over again.
One of the biggest mistakes that new businesses make with their cash flow is how they handle the bookkeeping side of things. If you are allowing customers to pay after you’ve provided a service, then you have to wait for a project to be completed before you have any cash flowing into your business. Changing your mindset and adopting customers paying half now, half later can ensure that you have cash flowing through your company from the day a contract is signed.
Also, allowing for pre-sales of upcoming but not yet released products can get cash moving through your business, which can prove very profitable for you. You see, your company is going to rely on people spending their cash to stay alive and successful and if you can’t see how being a success rides on whether you are offering the right thing to the right customer, then you shouldn’t really be in business.
If you want your business to stay successfully afloat, then you need to consider the maintenance of a steady cash flow and how it will impact your company not to have one. Ensuring that your business has a cash flow from day one is important and being too generous with discounts with the customers that you have is very nice, but it’s not going to help your business to expand. Cut your losses where you can and make sure that cash keeps moving through your business from the very beginning, and you will be able to reap the rewards of the effort you have put in.