Mental wealth for B2B Magazine by Darleen Barton
According to a survey conducted by Discover Financial Services in 2008, lack of cash flow is a major problem for nearly 44 percent of all small businesses. While it is only natural for a business to experience fluctuations in income, generating sustainable cash flow is perhaps the only way to remain afloat. The irony of the situation is that a majority of the business owners either neglect or simply don’t know how to generate and manage cash flow. Guess what? Nothing has changed since 2008.
I often go toe to toe with accountants about what is more important when building a sustainable business – The Money? or the Behaviour? – Here is my theory as simple as it is: You need to first move before you have motion or you are resting. That’s physics. You need to do the activity, to get the clients, to get the cash flow.
If you are not doing the activity that brings you in the business consistently, you will only be wishing for cash flow and eventually go out backwards. A lack of professional sales skill and low confidence can be a challenge in itself. After 30 years of working with Businesses from SME to Multinational Corporations, I know you need to engage in “conversation” with another human being to gain commercial leverage! FACT!
Show me your bank statement and I will show you your priorities and tell you all about your behaviours.
Here are a few check-ins: Bill promptly. Ask for advance payment 50% or 100%. You pay your car registration in advance your insurances in advance why not ask your clients to pay in advance?
Add terms for payment defaults. Set up the expectation in the initial appointment with your clients.
Pay wisely. The way you manage your payables can also play a major role in improving your business cash flow.
Know your customers. “80% of your sales come from 20% of your clients.” Know your “I” “S” & “D”* clients.
Consider price increases – You should analyse the market conditions regularly to know whether there is any scope for making a price rise. Don’t be price shy, you lower your price you will lower the consumer’s expectations. Do Not discount. Add value.
Package your products or services. The hamburger, the French fries and the coke.
Reduce Overhead expenses. All businesses will have some overhead expenses. But with careful observation, you can find areas where you can reduce your costs. Learn about Fixed and Variable costs in your business. Your variables are just that: variable! Do you need to buy better? Sell more? Be forensic. A lack of Sales Skills and no confidence can be the BIGGEST cash flow drainer of all time!
After 25 years in Business from SME to Multinational Corporations, I know you need to engage in “conversation” with another human being to gain commercial leverage! FACT!
Get off the dime and get face to face with your potential clients/customers AND repeat. YOU CAN NOT SELL A SECRET!
*Ideal, steady, demolition