Running a business means there’s an ebb and flow to income. Your goal, however, is to have more flow than ebb. Here are tips for injecting more cash flow into your business.
1) Reduce expenses – The less you spend, the more you keep. Reducing your business expenses is one of the fastest ways to generate more cash flow. Go through your budget and look for ways to save money. Like personal budgets, business budgets often have nickel-and-dime expenses that may not be needed. Search for ways to cut back on service expenses. For example, do you need all the bells and whistles on your phone service or can you get by with a lower-priced package. Bundling services, such as Internet and phone, can save money as well.
2) Have a payment policy – Before taking on a new client, have a policy on how and when you’re paid. Your policy should include areas such as deposits, time frame for payment (i.e. 30 days), and penalties for late payment. This helps insure people pay on time.
3) Follow-up on accounts receivable – If you don’t follow up on outstanding invoices, you’re leaving money on the table. Along with your payment policy (#3), develop a system for tracking, re-billing and getting payment from clients who are delinquent on their accounts.
4) Bundle products/services – People like a good deal. Bundled products and services are perceived as having an increased value over buying items separately. People also don’t like to miss a good deal, so by making your bundle a time-limited offer, you encourage consumers to buy now.
5) Have a back-end offer – Yes, back-end offers can be annoying, but they are effective and can come across helpful if done right. Make back-end offers that enhance the purchase and/or continue to solve the customer/client’s problem.
6) Create a follow-up system for repeat business – It’s much harder and expensive to generate a new customer than to entice a past customer back. Getting repeat business starts by offering top quality products and services, and customer support. Once you’ve done that, develop a system for staying in touch with past customers and create incentives for them to return. Email and direct mail are two ways to stay in touch. A rewards program or coupons give incentives for them return.
7) Develop a referral program – Second only to repeat business (#6), referrals are tops in generating new sales. People who are referred to you are already primed to like and want to buy from you. Encourage past customers and prospects to refer new business to you. Sometimes all it takes is asking for referrals to get names. Or you can develop a referral program with incentives to people who send you referrals.