Business Bullets - Finance

One of the biggest problems I see with small service-based business providers, particularly those whose owner is the sole provider of the service, is how to ensure consistent cash flow. So that you don't experience the peaks and troughs of cash coming in whilst delivering your service, then cash stopping when service delivery ends.

The way to deal with this is first to recognise it as a problem. This may seem obvious but many small business owners do not fully know their numbers. Consider how often you have too much month left at the end of your money. How often you worry about how you're going to pay the bills or pay yourself. Ask yourself what you stop doing or put off doing because of a lack of cash.

Once you've established this really is a problem for you, you need to manage your cash flow rather than have it manage you! You can of course focus on reducing your costs i.e. the money flowing out. However my focus here is on how to increase the money flowing in.

Top Cash Flow Management Tips

Tip #1
Have more sales conversations. Don't commit all your time to 'delivering' so that you get so busy you stop engaging with your prospects. Ensure you prioritise and schedule time in to talk to them and listen to what they want. And if you need help to complete everything else in your business then get it, but do the sales yourself (at least until you have a process that works and you can replicate it). Sales is the lifeblood of a company, and without consistent attention it will die.

Tip #2
Create packages at different price points. If you usually offer a set service think creatively about what you can offer and how. Can you provide some standard knowledge and information in a different format, as a written, audio or video product? How about a pick and mix package of products and/or services? Or a retainer package? The possibilities are endless. You just have to meet people where they are right now and give them what they want in accessible ways. So create more packages.

Tip #3
Make offers on a regular basis. When you engage with prospects and when you have sales conversations, make them an offer. Don't be tempted to 'think about it and get back to them' - make them an offer immediately. If you don't it's not really a sales conversation! And if it's not appropriate to make an offer explore whether you're actually talking to your ideal clients. If not, that's a different issue, it's about positioning and marketing rather than sales.

It's important to do these 3 things on a consistent basis, to have a system and a way of planning your time effectively so you're not spending weeks or possibly months focused exclusively on service delivery, then in your slow periods, focused exclusively on sales and marketing. That's the way to inconsistent and negative cash flow. And that's why the saying goes 'turnover is vanity, cash flow is king.'

So please remember......you're in business to serve your clients in a way that suits them and you, and makes you money. Although money may not be particularly motivating for you, you cannot run a business without it. And the simplest way to make money is to always have more cash coming into your business than cash going out!

So have more sales conversations, create packages at different price points and make regular offers to improve the cash flowing into your business. Think of the difference this will make and go do it!