When looking at a normal business day, it is quite easy to identify one of the key elements of a successful business. On a day to day basis, this is cash flow. Many entrepreneurs even went as far as saying that the importance of Company cash flow in a business only comes second to profit.
A start up, or any Company, is reliant on cash flow. It is almost an impossible task to start a business without having cash at hand. It is very important that a start-up entrepreneur needs to establish Company cash flow as quickly as they can in the first year of doing business. An independent study has shown that when an entrepreneur is able to establish this, their chances of running a profitable Company in the following five years are increased.
With the banks becoming stricter on their lending criteria, it is easy for entrepreneurs to lose hope even before they have opened their business. Some may resort to taking loans with friends or family where others make maximum use of their credit cards. There are, however, more creative ways to generate the much needed Company cash flow.
One of the best ways to get the cash flowing in your business is to lead the customers to buy a specific product off your shelves. You will have to strategically select these products to ensure that you will receive maximum profit from that product.
A great way to ensure that you have stable Company cash flow in your company, is to ask for a deposit or something similar. This works well if you have a business that for example delivers services to secure a booking. The same can work for product based businesses. You can ask for a deposit for pre-orders to secure the product on behalf of the customers. You should then keep in mind that you will have to deliver on your promises. If you betray the trust of your customers at this stage, it will impact your business in a very negative way.
Stay away from giving discount:
A cash flow killer is giving discount. This is one of the main factors that can contribute to small profit margins and eventually a lack in your Company cash flow. An easy way to get around giving discount, is to offer other benefits for buying from your company. You can offer incentives that will ensure that customers come back to your Company. It is also important to let the customer know that your products are quality. When people know that they get a quality product, they will be willing to pay for it. Here is a great Article why small Companies should avoid giving discount.
There are many more ways out there to establish Company cash flow in your business. These are just some of the most popular methods that are used in Companies today. An important thing is to implement these strategies without the customer even knowing it.
Once you have established a method that works best for your business, stick with it. Just remember that the market is ever changing and you might need to adapt your methods from time to time. It is always a good idea to have a back-up plan, for when a plan is no longer effective.
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