Times are tight in the US economy, and no one is more aware of this fact than small business owners. But do not despair! Here are 9 expert-tested ways to keep the cash flowing even in an economic downturn.
1. Raise Prices. This is a no-brainer, right? If you need more money then just charge more for your product or service. The ideal result of an increase in prices is that nothing happens. Your customers keep purchasing what you have to offer and you do not hear anything about it. The less ideal scenario is that some customers may go elsewhere, but do not let that stop you. Increasing your prices by 5 percent or 10 percent provides more profit and an increase in cash flow.
2. Find Old Customers and Invite them Back. Once you have gotten contact information on your customers, contact them regularly. Invite them to do business with you again, and give them incentives for doing so. Make an offer they can not refuse, request their presence at a private sale, send a newsletter, or call them and let them know that they will receive a free gift simply for returning the call.
3. Pay Slowly. The key to a slow payout is maintaining a good relationship with your suppliers, so find out what time frame is acceptable for them. If you are currently paying on a 30-day basis, ask your suppliers if they would accept payment on a 45-day or 60-day basis. If so, you have just gotten 15 to 30 extra days to use the money you have!
4. Sales Checklists. If you have salespeople working for you, instruct them to ask every customer to add on to their purchase. To make it easier, give every salesperson a checklist of things to offer customers.
5. Payment Checklists. Provide your administrators with a list of each customer and when that customer s payment is due. Have your administrators set up email reminders for each customer, letting them know that their payment is due.
6. Change Your Terms. The key to positive cash flow is getting money in as quickly as possible and paying it out as slowly as possible. Consider modifying your trading terms so that you get income quickly. If it is currently 30 days, try changing to 7 days or 14 days.
7. Be Picky About Your Customers. Only deal with customers who will cooperate with the trading terms that are most beneficial for your business. Sure, it may be uncomfortable to cut off relationships with slow customers, but you will notice a huge difference if all of your customers are fast-paying customers.
8. Get Endorsements. Find another business owner within your market niche who has a database full of customers that would potentially be interested in what you have to offer. Work out a deal with that business owner that is mutually beneficial and that gives him the opportunity to endorse you to his customers. 9. Evaluate Your Marketing. Analyze each one of your marketing campaigns to determine whether or not it is ultimately profitable. Eliminate any campaign that results in a loss and use only those that are profitable. If you do not currently have a marketing campaign, pick a tactic or two and see how they work out for you. You might start with flyers and emails. Your ultimate goal is a profitable offer within a profitable advertisement. Test everything, no matter how time-consuming it is. You will see a huge difference when you eliminate things that are not working and put more time and effort into the things that are.
An increase in cash flow means an increase in the growth of your business. Start off with one or two ideas and see how they work for you before moving on to others. You will find that you get results within minimal tweaking of your business strategy, and you will love the results!