Start-up businesses fail because of placing other business goals ahead of cash flow. Although it is necessary to generate sales leads and build your brand, cash flow is still an important aspect of your business. Your company needs cash in purchasing additional products, building up your team and even growing your business. Cash flow shortage can be due to lack of credit control, bad debts, late payment, profitability problems and disorganised bookkeeping.
Ways to have a consistent cash flow
Monitor your expenses. One way to attract prospects is by means of giving discounts. While this is a good sales and marketing strategy, it can still hurt your business if you have not forecasted the cost of your offer. Before you give discounts to generate sales, determine the discount’s impact on your business.
Create bundles of products or services. Giving discounts may not always be perceived as a suitable solution for generating sales, adding value to your products and services may not give you a better option. When you create bundles, you are injecting additional value to your existing business. If you are selling a car, you can provide free maintenance for one year. When you increase your price point and offer a guarantee, you have already helped reduce the perceived risk.
Create a back-end service or product. If you have already made an initial offer that does not generate profit, consider creating higher price points on back-end products and services. You can offer free service for the first hour and create higher price points in the subsequent hours.
Retain more customers. If your business is volume-driven, it is possible to encourage repeat business. With repeat buyers, you will be able to open bigger doors to additional profit, cash flow and even business growth. More often than not, you will only gain profit from your customers on the next transaction. It is important that the customers have a positive experience so they will consider buying again. You can also offer loyalty rewards for frequent shoppers. You may also offer freebies so long as you are dealing with excess inventory.
Pre-sell products. A business owner who wants to encourage sales sooner can consider pre-selling products and services. It provides consumers a way to plan for their future. If you have outdated products, you can also take them back at a pre-arranged price.
There are instances when new businesses face one or more cash flow problems when starting out. If these issues occur, small business owners should pay close attention to such problems and develop solutions so cash keeps flowing into the business. A good bookkeeper can help you take care of your cash by helping you avoid bad debts and late payments through good bookkeeping habits.