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5 Ways to Keep Cashflow Positive


 

If you’re a start-up business owner, then one of the mistakes you could make is by creating business goals that are ahead of your businesses cashflow. It’s important to spend time on building your brand and trying to bring in new clients but to do this you need a steady cashflow. Cashflow is the amount of cash that is coming into your business.

It’s a good idea to keep 10% or 20% of your monthly revenues on hand, as you’ll be able to reinvest into the growth of your business, purchasing services or new products, gaining new suppliers or employing more members of staff.

 

Here are 5 ways on how to keep cash flowing into your business:

 

Know your expenses:

Discounting does allow you to attract new customers, but if you are selling your services or products as a loss, it doesn’t help generate positive cashflow.

If you do decide to add some discount to your services/products, then make sure you know the impact of what you are offering and if there will be any fallout. You need to know your overall cost basis, how much you would ideally charge, the cost of the offer and the profit margins. When you have figured all of that out you will be able to see whether you are breaking even or whether you’re losing out on money.

 

Product or services bundle:

If you don’t think discounting isn’t for your business, then try adding value by making bundles of your products or services. For example, some car manufactures pair breakdown cover when they buy a new car, or other services they could provide. You can increase your price point initially because you have lowered the risk of offering something as a guarantee.

 

Back-end products or services:

If you don’t think your original offer will bring in new customers, then you need to find ways to create higher price point on the back-end of your products/services. If you’re a catering company you could state the first hour of catering is free, but other hours will go up in price.

 

Encourage repeat business:

If you work in retail then you need cashflow, profit and growth, you might not start to profit on your business until the third or even fifth transaction, so you need to make sure that your customers keep coming back.

To increase customer loyalty try offering VIP offers for frequent shoppers which can help with repeat business.

 

Pre-sell products or services:

If you want to encourage sales sooner, then try pre-selling your products/services. this might encourage your customers to plan for the future or get a jump on some limited-edition products/services.

Added: 20 Jun 2019 12:25


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