By David Finkel
Every business owner at one time or another has struggled with cash flow issues and there is nothing worse than having a lot of orders coming in yet still struggling to pay your vendors on time.
So I wanted to share some tips that I often share with our business coaching clients to help them quickly boost cash flow. These are intended more as fast-acting remedies than as long-acting cures , so keep that in mind.
1. Start A Reactivation Campaign.
If you have been in business for more than two years, and provided a great deal of value to your clients then a reactivation campaign might be just the thing to boost your cash flow and get things moving again.
A reactivation campaign involves going back to past customers or clients who for one reason or another haven’t purchased from you in a while, and inviting them to buy again. The concept seems pretty simple, but the results can be really powerful.
2. Learn the Art of The Upsell
Want to make more money? Sell more! Try selling more to your current client base with upsells, resells and cross-sells. Finding ways to provide more value to your clients and customers by getting them to buy a larger, deeper, more involved bundle of goods or services (up sell), buying more frequently (resell), or buying complementary and related goods and services from you (cross sell) is a great way to get the cash flowing again.
3. Work on Your “Hot Prospects”
Every business has a small subsection of 5 to 15% of its prospects that are a higher caliber of buyers deserving of a dedicated follow-up process focused just on them.
But unfortunately, a lot of businesses don’t take the time to focus their efforts on this group thus losing out on missed sales opportunities.
So carve out your “hot prospect” list, and do it in a systematic way so over time your best prospects get the most and best of your company’s sales energy to help them buy from you.
4. Work On Collections
Yes, it’s a scary word. Most business owners are simply unforgettable or even afraid to look at their collection practices. They bury their heads in the sand and passively wait to get paid. Many are even afraid of upsetting clients by asking for payment and push it off onto their bookkeeper or another poorly equipped member of their team.
My best advice is to take a good hard look at when your money is coming in.
Review your balance sheet or run an “aged A/R” (accounts receivable) report out of your bookkeeping software (standard on just about every software you’re likely to be using) and see how much of your money is sitting in uncollected receivables.
Remember, the only thing worse than a lack of sales is a surplus of sales that you simply don’t collect on (or collect on so slowly that it forces you into a cash crunch.)
With these 4 tips you should be able to increase your cash flow and grow your business.
David Finkel helped over 100,000 Maui Mastermind clients buy, build, and sell billions of dollars of business assets. An ex-Olympic-level athlete turned business multi-millionaire, David is an American success story. He is co-author of, SCALE: 7 Proven Principles to Grow Your Business and Get Your Life Back, and one of the nation’s most respected business thinkers. A Wall Street Journal and Business Week bestselling author of over 11 business and financial books, his how-to business and financial articles have appeared in over 6,500 periodicals across the United States. David is Founder and CEO of Maui Mastermind.