Avoid These 7 Cashflow Killers

Avoid These 7 Cashflow Killers

Running out of cash is one of the most frightening (and sadly most common) things to happen to small businesses. It’s easily done if you’re not keeping an eye on things and can sometimes be hard to spot before it’s too late. So what can you do to make sure it doesn’t happen to you in your business?

1. Understand the numbers in your business When it comes to the numbers in your business, knowledge is everything. At any given point you need to know what you owe out and what is owed to you. You need to know how much you have tied up in stock. You need to know how much you will need to fulfil orders. You need to be able to pay yourself, pay the bills and pay for any help you employ. Make sure you know your costs and how much profit you make on everything you sell, as an absolute minimum.

2. Don’t count your chickens Don’t assume you have an order until you have the order! Don’t assume people will pay on time. Don’t buy extra stock ‘in case’ you’ll need it. Don’t overstretch yourself. One of the biggest cashflow killers is tying up money in stock or supplies or committing to costs without having the cash to cover it. All it takes is one non-payer, late payment, cancellation, change in circumstances to throw your plans out of whack and your cashflow with it. The last thing you need is to end up with stock you can’t quickly liquidate or commitments you can’t meet because you trusted someone to do the right thing. Get your terms and conditions in place. Have a clear refund policy that protects you if someone cancels once you have ordered stock. Don’t take risks on someone else’s behalf using your business. Protect your downside (in other words don’t commit more than you can afford to lose) and be mindful. It’s not magic money, you have to earn it to cover what you pay out, and then some.

3. Track your sales Don’t guess how much you have taken in sales, KNOW it for certain. Track every sale coming in. Track deposits. Track instalments. Know what is due, when. Look for patterns. Know your quiet times, so you can come up with ideas to drive additional business. Know your busy times so you can plan for them and manage your cash accordingly. Where you put your attention is where the magic happens, so if you track your sales and understand how they work in your business, you will get more. Know how much of it is profit at any time. This is important because your profit is what turns into your salary or gets reinvested back into your business – if it’s not profit then you shouldn’t be spending it unless it’s directly related to delivering your products or services.

4. Collect your payments If you give credit to customers, collect it when it’s due. Don’t let embarrassment or fear of offence stop you. Think like a business owner and put processes in place so you know what is due, when. Make your credit or payment terms very clear at time of purchase. Get the customer to read, acknowledge and sign them so they can’t come back later and say they didn’t know how it worked. On the day the money is due (or even the day before) send a polite reminder notice. As soon as the payment is overdue, chase up every day or two.This is YOUR money. You are not here to cashflow someone else’s business. Successful business owners don’t let their money collection slip. You’re doing nothing wrong by reminding late payers and requesting payment, you are simply running a business in a professional way and if they don’t like it they can go elsewhere. It’s not worth putting yourself under stress trying to accommodate bad payers, when you could focus your attention on your Super Customers and have people who would happily pay in advance.

5. Plan ahead If you know you have shows or events or busy times coming up, plan ahead, not a week or two but a few months ahead. That way you’re giving yourself time to buy stock a little at a time, make the most of special offers and set aside cash as a contingency. Businesses are more likely to run out of cash if they get caught out or haven’t planned ahead. Don’t put yourself in that position.

6. Be Frugal You have to earn every penny you spend. It’s very easy to spend, spend, spend but how much will you need to sell to replace that? If you start adopting this attitude, you will soon get a different perspective on your business. That swanky new laptop bag might be gorgeous but if you have to find 5 new customers just to cover the cost of it, is it really worth it? If you’re spending money on stuff for the business, make sure you get a good deal but don’t talk yourself into stockpiling to get a ‘wholesale’ price, otherwise you’ll potentially have loads of stock tied up in the business that could take months or years to turn into cash. Always think about the return you’re going to get on anything you spend.

7. Choose wisely Choose your customers (not all customers are good customers). Sit tight, be really clear who your Super Customers are and market to them rather than saying yes to everyone. Make wise decisions. Don’t cashflow someone else’s business to the detriment of your own. Don’t be bullied into putting up with someone else’s bad money attitude  – you keep control over your business. Have confidence in yourself and your ability, you know more than you think.

I know it can be tricky if money is tight but the more you plan, the more you know your numbers and the more you realise that cash is the lifeblood of your business, the more likely you are to make sound business decisions and protect your business. My sales coach used to make me justify every penny I spent for months until I understood how much extra profit I’d need to make to cover my less-than-thrifty spending habits. I promise I’m not a killjoy, I want you to love your business but I also want you to keep having a business and not fall victim to dodgy cashflow. Did anything in this blog resonate with you? I’d love to hear from you in the comments and I’d also love to hear any other cashflow tips you have. Protect your cash and keep building your gorgeous business.

How To Keep The Money Flowing Into Your Business

How To Keep The Money Flowing Into Your Business

I was chatting to a lady the other day and she said ‘Claire, this business is bad for my nerves and my blood pressure. One day it’s fine, I have money in the bank and then within days it’s all gone on staff costs, supplies and other bills. Then there are days when sales are GREAT and other days and weeks when nothing I do works, nobody buys. I feel like I’m always playing catch up – why can’t I get a steady stream of customers and money coming in, so I’m not always in this position?

I totally understood what she was talking about – it’s the unpredictability. Wouldn’t it be lovely to be able to predict the future and know who will buy, and when? To know you have enough money coming in to cover your costs, pay yourself a salary and have some left over? But as you probably know, it’s harder than it looks. Business is like a rollercoaster, where you lurch from highs to lows, seemingly with no control over what’s happening.

It’s a real challenge, because when your business behaves like that the only way to stop that rollercoaster effect is to change the way you do things. You have to smooth out the bumps and level out the ride and that takes time and effort, but once you get there it’s SO much easier (and better for your health).

So, How Do You Stop Those Frightening Ups And Downs?

The ups and downs are caused by a few things.

By not having a steady stream of clients, by not having a steady stream of money coming in and by not having a plan to keep sales moving all the time. So, what can you do about it?

Well, there is one thing you can do that will change the way your business behaves. It will smooth out the lumps and take out the quiet patches. And yet, hardly anyone does it. And even when they do, they hardly ever do it properly and consistently and yet, it could TRANSFORM their business for the better.

What is it?

Build Your Database!

This is one of the most under-rated areas of business EVER!

So many people don’t bother building their database or collecting email addresses – or worse, they collect them and do nothing with them – and yet it could be the ANSWER to most of their business rollercoaster problems!!

Let me explain. 

When someone visits your website, they might take a look around, find a few things they like but they don’t buy – why not? Because it’s not the right time for them. Either they are looking for something they don’t need right now, but are just researching (think gifts for upcoming birthdays or other celebrations) or they aren’t in a position to buy YET because they are saving up or need more information or to talk to someone else about it.

So, although they LOVE your stuff, they decided not to buy today. So they go. Forever. And then they forgot what your site was called so even though they vaguely remembered how lovely it was, after a quick Google it didn’t show up so you lost them.

What are you going to do about it?

“What do you mean, what am I going to do about it?” You ask! “I can’t MAKE them buy, I can’t MAKE them come back!” I hear you say. Well here’s the thing: you can’t make them buy TODAY but do you know what? You CAN make them much more likely to come back and buy when they are ready.

How?

You can get them into your database (or onto your mailing list, however you want to describe it) and you can build a relationship with them.

You can send them your regular e-newsletter, packed full of things they will love and find useful. You’ll share new product information, you’ll tell them about any sales or offers you have, you’ll talk about the business, you’ll suggest ways to use your products and services and you’ll include lovely testimonials from happy customers. Every month.

That way, they get used to seeing you in their inbox.

They start to look forward to getting your emails and hearing from you. They look out for your sales and offers. They become familiar with your name and your business and your products and services.

A Transformation Takes Place

They change FROM someone who loved your stuff but wasn’t ready to buy, so they left your website never to return INTO someone who looks forward to your monthly email and buys even when they hadn’t planned to because you put such lovely things under their nose all the time. 

You go from being a lost opportunity TO being the business they think of when they need what you sell. And when they are ready to buy, they will buy from YOU. It’s like magic. But it’s actually quite simple, really. You just need to stay in touch, keep sharing stuff they love and keep adding value.

It Just Keeps Getting Better

Not only do they get used to seeing you around in their email, they also start to get to know you (and people buy people, remember?). They learn about your business.

If you’re clever, you’ll have videos and images on your website and social media pages of you and your team so customers know who they are dealing with – it will bridge the gap between you being an ‘untrustworthy stranger’ to being someone your subscribers feel they know. And you can direct people from your newsletters to your website to find out more about you and your team.

People are much more likely to buy from you if they feel there is a ‘real’ person behind the business who loves what they do and can help them if they struggle with a purchase. This is where you have a HUGE advantage over the big faceless corporates who can’t manage that personal touch.

Smoothing Out Cashflow Lumps

And remember we talked about that lurching rollercoaster feeling of ups and downs in sales and money coming in? Well building your database and keeping in touch with your subscribers via regular e-newsletters is an antidote to that. It smooths out the big lumps. It steadies the ride.

Think about it. Most businesses rely on potential customers finding them on Google. If those people visit their website and don’t buy there and then, they have lost them. What a waste.

Not you though, you’re clever and you’ve got this covered. You know now that you need to get them onto your email list and keep in touch with them.

And you’re sending them lovely newsletters packed full of things they will find interesting, useful and valuable.

And then once a month you send them a BIG DEAL newsletter. A newsletter with a FAB offer they can’t resist.

Do you think they will take notice? Well, they will probably take far more notice of YOUR offers than those of any other random company who happens to tout to them. What will actually happen is that you’ll have control over your sales. Let me just repeat that in case you didn’t get it.

YOU WILL HAVE CONTROL OVER YOUR SALES

That’s MASSIVE!

Because 80% of your newsletters and newsletter content will be non-salesy, added value loveliness, when you DO send out an offer your subscribers will take notice. And BUY.

This is what I do with my business. It’s what ALL successful businesses do – because it works!

It takes time to build your database and build those relationships. You have to put some work in to establish your monthly newsletter and work out what your subscribers love to see and read. But once you get the recipe right, it really works.

When you send out offers, the people on your growing email list will buy. 

That counteracts seasonality. It flattens out those horrible rollercoaster peaks and troughs. It gets rid of the stress and the fear of NO SALES. It works whether you have a physical shop or premises, or you’re totally online. Quiet times are a thing of the past. You just need to plan your e-marketing in a very simple way and you’ve got it covered (eg. January Sale, February Valentines, March Spring Offers, April Showcase, you get the idea)

So let me just recap:

  1. Build your database (another blog coming next week to tell you HOW to do that)
  2. Keep in touch every month
  3. Share information that’s topical, useful, valuable and interesting but not SELL, SELL, SELL
  4. Once in a while, on a regular basis, send out a BIG DEAL OR OFFER newsletter
  5. Watch the sales come in

Are you up for a challenge? The sooner you start building your list and e-marketing, the sooner the magic will start to happen. I can’t wait to see how you get on!

7 Ways To Create Money FAST In Your Business

7 Ways To Create Money FAST In Your Business

We all have times when, for one reason or another, we NEED to come up with some quick cash in our business – so how DO you create money when you need it? I have some ideas for you. Some of these depend on what type of business you’ve got, not all of them will work for you, however, one might and then you’ll get some money quickly –YAY! These are NOT strategic business moves, they are one-off quick fixes that will dig you out of a hole. If you keep having to do this, you need to look at what you want from your business, why you keep running out of money and how you can put a business strategy in place with the right pricing, profits and marketing.

  1. Chase Money You Are Owed

If you have got people who owe you money…chase them! If you need money and you’re feeling a bit broke and you’ve got people who owe you on invoices, then chase them. Believe me, the people who shout the loudest get paid first. It doesn’t matter whether it’s a big organisation or a small organisation; do not be embarrassed to ask for money.

If you can’t bear the thought of it, then invest in an hour or two of a Virtual Assistant’s time and get them to make the calls.

The reason your invoices get paid late is because you are not top of the list to be paid. You’re not chasing, you’re scared of being a nuisance. You feel that if you chase money they’re not going to like you anymore and you won’t get any more business. There are two things I want you to think about: firstly, if this customer always pays you late and clearly doesn’t respect or value you enough to pay you on time, do you really want them?

Secondly, the only way to deal with customers like this is to get to the top of the list – they are probably juggling payments and will pay the people who shout loudest. You need to be one of the loudest shouters.

Get to the top of that list, in a lovely, respectful and non-confrontational way, but get to the top!

 

  1. Invoice Quicker!

If you’ve been sitting there with invoices not ready to go out because you only invoice at the end of the month, STOP! Who says that they have to go out at the end of the month? – They don’t!

Why not start invoicing when the job is finished?  You don’t have to do what everybody else does, but if you do something on the first of the month and then you don’t invoice to the end of the month and then they take another month, six weeks, ninety days to pay, how long is it since you did that work? That’s ages!

Invoice once a job or a task is completed. This will help your cashflow and stop the broke/OK/broke rollercoaster that seems to have taken over your business. You’ll have steady income throughout the month – it might be smaller amounts but that’s fine, it all adds up and doesn’t leave you so vulnerable.

The other thing you can do is stop giving people 30 days to pay. Start thinking about changing your terms and making it half up-front, or all up-front, or 7 days or 14 days.

It gives you the right to chase it quicker. Your mind monkeys might be going crazy at this point, telling you “I can’t do that, I’ve always done 30 days, I’ve never chased clients, this is dreadful!”  but I’m telling you, if you need money, you need to start thinking like a business owner.

[Tweet “If you need money, you NEED to start thinking like a business owner! #thegirlsmeanbiz”]

If you’re late with a credit card payment, you get fined. If you’re late paying your suppliers, you get people calling you. Start thinking like a business owner and stop thinking like ‘little old me’ and you’ll find you have far more money in your business and your pocket.

 

  1. Offer An Amazing Deal To Existing Customers

Rather than just chasing after new customers all the time, put together some kind of really attractive deal or offer that you can send out to your existing crowd. Remember, these are people who love you, who know you and who have bought from you so they know the quality of what you offer.  They will feel special because it’s only for them.

There’s a really good chance that your clients will think “I loved her stuff before, so I’m going to take advantage of this, even if I’m not going to need it right now, I’ll get it because that’s a really good deal.” Even better, put a deadline on the offer to encourage them to make a quick decision – urgency is a great sales tool!

 

  1. Hold A ‘Flash Sale’

Flash sales are quick, easy sales that last a day or two at most and have heavy reductions on your products/services – they are great for generating interest, creating a buzz and bringing some money in quickly. I do these a couple of times a year, for example for 24-48 hours, everything in my shop is half price.

Because my products are virtual products, I don’t have any costs associated with them. Clearly you can’t do that if you’ve paid out for stock – you need to at least recoup the cost of the stock, but imagine the interest you could create on social media and among your subscribers if you marketed the heck of out this special, one-off sale?

Flash sales are a great way to let people dip their toe in the water. People who have never previously bought from you can try out your products or services at a greatly reduced price. If they love what they see, they will be back and they’ll be paying more but they won’t mind because they know your business is a perfect fit for them – the Flash sales was a low-risk way for them to see if they like you. Works like a treat AND brings in some nice chunks of cash in the meantime.

5. Be Open To Money Flowing To You

If you set your intention that you are going to let the money flow in, you’ll suddenly see lots of opportunities open up around you. The more you focus on being open to opportunity, the more opportunities will present themselves.

If you’re into the law of attraction and if your into energy work, which I very much am, setting your intention to say “money will flow to me easily, I’m going to get lots of money coming to me today”  can change your mind-set and change your entire perspective and change your energy.

So if you want money to come to you, believe that money will come to you!

6. Sell Stuff You Don’t Need

A really basic one, if you need some money quickly to pay a bill or book a holiday…sell stuff you don’t need! If you’re sitting there with piles of clothes you don’t wear, get onto eBay, start selling them. If you’ve got a photocopier or a printer sitting there unused, put it out on Facebook. Maybe you’ve got baby stuff from when the kids were little, just start getting stuff out there. Spend a day selling stuff that you don’t need and following on from point 5, be open to money flowing.  You’re getting rid of stuff that you no longer need, which is great for your energy and decluttering at the same time.

Imagine if just one of these ideas worked in your business – you’d have cash in your hand within days. Imagine if several of them worked! But it’s no use just thinking about it – action is everything. Pick one to try and implement it today.

7. Create Something That Will Create Money!

Depending on your type of business, you could create a class or workshop to teach what you do – either online or in person. You know your stuff inside out. Other people want to know what you know and will pay to learn. What could you teach?

Note:

Clearly, none of these are long-term, strategic business moves. They are short term fixes for when you need cash, fast. You can’t run a business like this all the time because all the tips above will lose impact if you overuse them, and you’ll lose credibility.

Instead of lurching from one cashflow crisis to another, now would be a great time to think about what you WANT from your business, how much you want to make each month and where those sales will come from.

Get a plan together.

Take control of your business and start to think like a business owner.

Put some sales targets in place and get to grips with your numbers.

Before you know it, you’ll be a business whiz with a healthy cashflow and a healthy income. There are loads of free resources at www.thegirlsmeanbusiness.com to help you with this, all it takes is a few simple steps and a determination to make it happen, so what are you waiting for?