It is important for every new entrepreneur to ensure that there is constant cash flow into the business and these needs to be the very first priority. For startup entrepreneurs and one of the most common and biggest mistake that is committed by the individual is to place the other goals of the business much ahead of the organizations cash movement.
Things to Understand
It is necessary to spend adequate time trying to create a brand and to generate sales leads. At the same time, it is also equally necessary to cultivate immediately steady stream of free ‘flow of clash’, which is the cash amount coming into the organization above all the expenses. In case, there is no money, then business is likely to wind up and the entrepreneur would not have chance to worry about the other things.
As a rule, if possible, one should keep around 10% – 20% of th3e monthly revenue in hand, since during this time, in most organizations, there is a chance for reinvesting in the development of the business, right from purchasing extra service or products to getting more suppliers or to create a team when there is a need.
Ways to Finance can keep Consistently Flowing into the Business
- Knowing the expenses: Even though discounting, via coupon sites it is possible to attract new consumers, selling anything for loss would not assist the entrepreneur to generate positive financial flow.
- Bundling services and products: Although discounting is not always recommended, value adding is. Creating bundles of services or products for example, organizations can try to inject immense tangible and perceived amounts of value into the offerings at very little expense. A good instance in this regard is maintenance agreements that some of the car manufacturers have been offering along with purchase of new cars. This type not only helps to allay major concern that consumers need to pay for the breakdown or the time that is lost at dealership, also it offers appropriate value, when taking into concern limiting out of pocket maintenance expenses.
- Creating back end service or product: In case, the initial offer is known not to profit by getting in new consumers, then it would be wise to find out ways for creating higher price points especially on the backend services or products. The initial catering hour is free, however, the subsequent hours can shoot-up in price.
- Encouraging repeat business: In case, the entrepreneur is into volume driven business such as retail, try to land repeat shoppers can be the holy grail to get constant financial flow, to profit and develop. In most of the cases, the entrepreneur would not profit on the customer, unless the 3rd, 4th or even the 5th It is for this reason that one should devote all his efforts towards getting consumers to come back repeatedly. To achieve this, there could be a need to come out with loyalty programs, frequent shopper programs, VIP offers and much more.
Pre-selling services or products: This would be a wonderful choice to encourage sales quickly.
