What is the most important thing to work on when building your business? Is it brand? Is it sales leads? Ultimately, you do need both of these, but without a steady stream of money coming into the business, neither of these goals will live to fight another day. It is crucial to keep the cash flow of your business, well, flowing.
From an article in Entrepreneur.com, here are five ways to keep the cash flowing.
Know your expenses. Discounting prices may help in the short term, but selling anything too low will not help generate a positive cash flow. Make sure you know exactly how much things cost, and how much profit you are making.
Bundle products and services. This is called “adding value”, and is much more advantageous than discounting. This gives a higher perceived value to your offering for very little time or cost to you.
Create a back-end product or service. Offering something initially for free or at a lower cost, but then having a most costly offering once the initial offering is done. This is also the model for free apps, with in-app purchases. Give customers something for free or very little cost, with the option to purchase more at a higher cost.
Encourage repeat business. Customer loyalty is much more valuable than multiple one-time only buyers. The cost of attracting new customers is much greater than retaining customers, so ensure any current customers come back for more. Giving repeat customers incentives or even freebies is a good way to encourage repeat buying, as long as the impact is positive on your business.
Pre-sell products or services. This is a great way to ensure you have sales into the future, and allows customers to have “first dibs” on new products or services.
A good rule of thumb is to keep 10-20% of your profits monthly to reinvest back into your business. This will give you more flexibility to invest in new products, new staff or new infrastructure should the need arise.