Cash coming into your business must be greater than cash going out if you want it to stay afloat. So what can you do to increase the cash flowing into it?
1. Collect Outstanding Payments
Do everything within your power to collect outstanding payments. While it is important that you maintain a good image, you have to be tough enough for some customers to pay up. Depending on how much they owe you, send strongly worded reminders, involve collection agencies or take them to court.
But be careful. Sometimes a wise business allows some debts to go bad. Remember, you are in it for the long term. If you go about it the wrong way you could hurt your business. Business still depends on good will.
2. Put Some Money Aside
While it may seem contrary to what would naturally occur to you, it is important that you put money aside if you want to increase your cash flow. What would happen to your cash flow if you experienced an equipment breakdown in critical sections of your operation? Money put aside will help you get up and running as soon as possible. Think of contingencies and make sure you have some money that can help you get over problems as quickly as possible. That said you can't keep your money idle in anticipation of emergencies. Money kept unused is money ill employed. So don't make this money any more than what you need to handle issues that may arise with core operations. How large should this amount be? It should be large enough to take care of any emergencies that may disrupt your business.
Another reason this helps your cash flow, is that it will save you from borrowing money in those “unforeseen" situations. Don't forget that a loan avoided is money saved on interest!
3. Invest Extra Cash
Invest extra cash that comes in wisely. By investing, I don't mean you should buy shares in another company, look around you. You know your business better than anyone else. Are there things that you can do to increase sales? Can you handle more leads? Then spend the extra money attracting them. That will increase your cash flow. Can you give an incentive for existing customers to buy more? Do so. Dropping your profit per sale is a good idea if it will boost your overall profit margin. Running promos or a rewards program can get you more sales.
4. Develop More Efficient Methods
Increasing your conversion rate by even 0.5% will mean a substantial increase in your bottom line. Therefore, it is important that you take the time to go through your marketing system and try to make it more efficient. Do you need to improve your sales copy? Do you need to add more payment options?
5. Offer Incentives For Advance Payments
Get your payments in advance and you will easily increase your cash flow. Not only will this increase your cash in hand, it will help reduce redundancy. So what can you do to get as much money as possible in advance?
a. You can give a discount for advance payments. Even your insurer does this. You get to pay more if you pay monthly than if you pay yearly in advance. Give a good discount that doesn't choke your business and you'll get some customers interested. The other benefit of doing this is that you can count on those customers being stuck with you for that period of time. No one likes to lose money.
b. You can give a special privilege or value added service to customers who pay in advance.
6. Sell Them More
It is easier to sell more to an existing customer than it is to make a sale to a new prospect. So you should look to create new products or source complimentary (Noncompeting) products from other businesses that you can promote. Just make sure that the product or service you are cross-selling is worthy of your name. You don't want to ruin your hard-earned reputation for immediate profit.
7. Make Your Customers Your Partners In Sales
How about getting your customers to bring in more business? Who is better positioned to sell your product/service than a customer who has experienced it? You can give them the incentive to do this by starting an affiliate program.
The good thing about affiliate programs is that they only get paid when they deliver the desired response. This keeps your risks low whilst increasing your profits. You can grow your business exponentially with this method if you get it right.
Each customer now does more than just buy your product or service; they also promote them to others. So assuming you have a hundred customers, each of them becomes a potential sales executive whom you get to pay only when they deliver a sale.
I have covered just 7 ways to improve cashflow into your business. For even more tips and FREE information on how to support your cashflow and maximise your sales procedures you should visit http://www. provenbusinessprofits. com
Wishing you success
Copyright 2012 Proven Business Profits
by Andy Terry Proven Business Profits
Andy Terry specialises in showing companies creative and effective marketing strategies to help dramatically increase sales and profits and improve cash flow. Andy will show you innovative, tried and tested, easy to follow marketing tactics for both on-line and off-line business success. Regular updates and insider secrets. For more FREE information visit http://provenbusinessprofits. com