Cash flow is the life of your business.
If you’re generating at least a decent amount of revenue but having trouble paying your bills (or yourself), you probably have a cash flow problem.
These are the 4 primary reasons most small business don’t have enough cash flow:
- Sales are too low
- Clients/Customers owe you too much
- Prices are too low
- Expenses are too high
Try these strategies to increase your cash flow:
Sell more to your existing customers.
- Review which products your current customers/clients have purchased and the ones they have not. Where appropriate, contact them about products they haven’t purchased yet.
- While you’re talking to them, ask them what else they need
- Create or source those products/services if there’s enough interest
- Set up Automation so customers are offered products they haven’t purchased on a regular basis. Think Amazon’s “You Might Also Be Interested In…”
Reduce your spending. Decreasing your spending is one way to increase your small business cash flow. All savings from reduced expenses go right to your bottom line and into your pocket!
- The first step to implementing this strategy is to carefully analyze all of your business spending.
- How much do your office supplies and electrical bills cost every month?
- How much do you pay for insurance, employee salaries, and other bills?
- How many recurring memberships do you have for business tools (Dropbox, Social Media posting software, password manager, etc. )
- Bank fees and Merchant Account fees
- After analyzing your spending, look for areas that can be reduced. However, it’s important to approach spending cuts carefully because pay cuts can drive away employees. In addition, if you try new services to save money, the quality may not be the same.
Extend discounts for fast payments. If you’re trying to encourage your customers to pay faster to increase your cash flow, then discounts for fast payments may help.
- If you’re trying to encourage your customers to pay faster to increase your cash flow, then discounts for fast payments may help. If you’re currently offering Net30, try Net20 or Net 15. Offer a discount if people pay in 10 days.
- The discount doesn’t have to be large, but customers may appreciate a small amount of savings. Try several payment plans with different discount levels to reach more clients.
- Watch How to Increase Prices Without Losing Any Sales video at https://youtu.be/a3cPjQq-ynM. The 2nd part covers the benefits and pitfalls of Discounting
Watch your inventory.
- Are you investing a large portion of your cash into inventory? Inventory may be the lifeline of your business, but you don’t want it to destroy your cash flow. Marcus Lemonis of The Profit always looks at inventory right away. The boxes of shirts, candles, or other items you sell shouldn’t sit in warehouses for decades. Sell it at a discount to get cash for new inventory or put it in the trash.
- Do you have digital content sitting on your hard drive that can be converted into sellable information products or courses? Examples would be speeches, webinars, handouts, blog posts, etc.
Raise your prices. Are you keeping up with inflation? You might be able to raise prices on your products and services to keep up with the market.
- Higher prices can lead to more cash flow, but they may also scare away customers. Find a balance that works for your business and your customers. Watch How to Increase Prices Without Losing Any Sales video at https://youtu.be/a3cPjQq-ynM.
- Hopefully, the people you lose will the ones that took up a lot of time and energy.
Consider collection agencies. Do you have a large number of customers who haven’t paid their bills?
- Collection agencies can help you recover a portion of the unpaid bills. They charge a fee and take a percentage of the money. However, you may not have the time or skill to pursue the customers who haven’t paid.
- Put Systems and Automation in place to quickly follow up with customers who get behind on their payments.
- Also consider selling your Accounts Receivable if they are very large.
- Take care to keep your AR reasonable from this point forward
Offer prepayment rewards. You can offer a variety of rewards ranging from discounts to extra products. You can make a special rewards program with gift cards or other items.
- Customers who prepay for large packages, services, or multiple items could receive extra rewards. Think Costco’s large packages of paper towels and toilet paper.
- These rewards can encourage them to stay and keep buying your products or services.
Creating a customer rewards program with sales, discounts, and other special rewards is always a good idea to expand your customer base and gain loyalty to your business. Birthday clubs are good, too. I recently got a free birthday sandwich from Togo’s. Of course, I purchased a drink and chips (high margin items) when I picked up my sandwich.
Which strategy are you going to implement first?
Incorporate several of these strategies into your business operations to discover what works best for you.
One of my specialties is showing business owners how to “Unlock $10k or More in Your Business Without Spending Any Money on Marketing or Advertising.”
Schedule with me for your free personal session (Value $495) at CindyMorus.com and let’s get More Profit in your Business and More Income in Your Pocket!
What is the current picture of lead generation and management in your business?
Here’s the deal: in order to start generating more leads with less time and financial investment, you first have to spend time setting up systems and making some changes.
Your goal is to establish a solid lead tracking and lead management system, and make small tweaks to your existing lead generation strategies.
This article will show you:
- The current status of lead generation in your company
- The purpose of lead tracking and management systems
- Types of lead tracking and lead management systems
- How to set up a lead tracking and or management system
- Qualified lead generation
- How to get more results from your existing strategies
Do you know where your current leads are coming from, or how many you get on a daily, weekly, or by-campaign basis?
If I asked you to tell me right now what your top lead generation strategies are, what would you say?
A big part of step-one is gaining a solid understanding of where your business stands right now in terms of lead generation. Otherwise, how are you going to know when your lead generation strategies are working? Or which strategies are working?
In a few minutes, I’m going to show you how to set up a lead tracking and lead management system that works with your business. But first, I’d like you to write down (on your pad of paper) what you think your top three lead generation strategies are right now.
Every business needs a lead tracking and management system. Do you have one in place?
A lead tracking and management system is absolutely essential to your business for a number of reasons.
One, it is the only way to know which marketing strategies are working, and which ones aren’t. The information your system gathers will allow you to make educated decisions about marketing campaigns and investments.
Two, it organizes your sales and marketing efforts and manages contact information in a user-friendly way. It’s clear who you called, when, what you said, and when you said you’d follow up.
Three, it enables you to manage your sales staff by tracking their progress on several leads at once. You’ll have access to an at-a-glance picture of their sales figures and productivity.
Your lead tracking system needs to:
- record the leads that arrive by phone, in-store visit, and website visit
- track the source of each lead over specific time periods
- record pertinent customer information
- be simple enough to be used by all staff members
Your lead management system needs to:
- track your leads through the sales plan or process
- increase customer communications or contact
- keep track of correspondences and follow-up requirements
- make it easier for you and your staff to close more sales
Here is a list of information you will want to gather from your leads.
Depending on the needs of your business and the lead tracking and management system you choose (i.e., do you need a mailing address, or just email address?) some of these items may be optional fields.
- Company Name
- Name of Contact
- Alternate Contact Person
- Mailing Address
- Phone Number
- Fax Number
- Cell Phone
- Email Address
- Website Address
- Product of Interest
- Source of Lead (i.e., How did you hear from us?)
- Reason for Inquiry
If it is appropriate for your business, you also may wish to gather demographic information from your leads – but keep this voluntary. This information would be ideally used in your market research analysis.
Keep in mind that your lead tracking and management systems need to be simple enough for everyone in your company to use.
Unless you are the only person in your company who manages incoming phone calls, greets customers and chases down leads, the systems you implement will need to be used consistently by everyone in your organization.
Once you have decided on a system, schedule enough time to train your staff thoroughly and be open to feedback. Since you’re not the sole user, you’ll need to consider their thoughts on the usability of the systems.
Pick a lead tracking and management system that suits your budget, and offers the features your business needs.
Each business will have different requirements when it comes to lead tracking and management. A retail store will have different needs than a realtor’s office or an online business.
The retail store may only need to record leads based on lead generation strategies, and keep lead information for their direct mail or newsletter databases. On the other hand, the realtor will need to make contact with their leads on several occasions, and need a system that will record and remind them of those correspondences. Online Businesses will need to know how many people are clicking on their ads, opting in for lead magnets and going on to make purchases.
Software for lead management ranges from simple to highly sophisticated, and can be a great investment depending on the needs of your business. Some CRM (Customer Relationship Management) tools are available online as a web-based system you can subscribe to and have access to on the road. For example, Infusionsoft Pro is an all-in-one power marketing, sales, and business suite. It automates sales, marketing and business processes, giving you the flexibility and power you need to grow your business with confidence. (I am an Infusionsoft Certified Partner – ask me about a demo or pricing)
I’ve listed the features and advantages to a number of different systems below – ranging from low-tech to high-tech, paper-based to web-savvy.
||This is a basic system used to manage leads by those who may be less comfortable with computers. This system will be effective at tracking low volumes of leads.|
||This is a slightly more sophisticated system that will allow you to track higher volumes of leads, and effectively organize the information that you collect into charts that can be analyzed.
In Excel, you are able to work with a number of tracking sheets in a single file, and create hard copy tracking sheets for staff to use at point of sale and reception.
Excel also has the capability of importing data from Outlook and Maximizer.
|Customer Relationship Management (CRM) Software
||A highly sophisticated system with advanced features.
Tracks a high volume of relationship-based leads, and provides a detailed, feature-heavy system for lead management.
Not ideal for retail businesses, or businesses that need to track a high volume of leads with minimal customer information attached.
||An ideal way to track and analyze website traffic to complement your overall lead tracking system. This is not a complete system on its own.
Requires the insertion of a specific code into each of your webpages, or each of your online advertisements.
Monitors usage statistics, and generates reports, charts, graphs, etc.
Bringing qualified leads into your business will save you and your sales team time, and result in higher revenues.
Qualified leads are simply the potential customers who are the most likely to buy your your product or service. They’re not just in your store taking at look at the latest features in refrigerators, they’re in the market to purchase a refrigerator. They’re not wandering in to see what a $500 handbag looks like, they are the kind of person who can actually spend $500 on a handbag.
Some of the people who will call you or visit your business will never buy from you no matter how good your sales scripts are or how much time you spend overcoming their objectives. There are a variety of reasons for this – and you’ll never eliminate all of these people – but you will need to focus on bringing in more of the people who are ready to buy.
The good news is you have spent so much time and energy cultivating a comprehensive knowledge of your target market, that you’re in a great position to increase the number of qualified leads you bring into your business.
How do You Get Qualified Leads?
The crux of qualified lead generation is making decisions based on the market research you completed on your target market. You basically need to know where to reach your market, and how to speak to them.
When you are designing, executing and making choices about your lead generation strategies, always consider these questions.
|Who is my target market?||Write down your target market description to keep you focused on the specifics of this group of people.|
|DISTRIBUTION IS EVERYTHING: How does my target market like to receive information?||Do they read the newspaper? Pick up the family mail? Spend hours on Facebook? Subscribe to Podcasts? Listen to newsradio on long commutes to work?|
|What motivates my target market to take action, and how can I tap into that motivation?||How will you tap into your target market’s emotional response? What issues or needs will mean something to them, and drive them into your store to solve them.|
|Where can I place my marketing message so my target market will see it?||Look at what you found out in your market research about your target market’s hobbies, activities and interests. How can you place your message or your product or service in their path?|
|What can I offer my target market to entice them to purchase from me?||Can you offer your target market something special, rare, or time specific that will appeal only to them?|
I’m going to show you how some little changes will generate big results for your company in short order.
Once you’re set up with a testing and measuring system (your lead tracking and management systems) to evaluate the success of your lead generation strategies, you need to start by looking for opportunities to juice up the strategies you’re currently working with.
|Use your new marketing message.||Make sure that you have put your new marketing message on all of your marketing materials, where new and existing customers can see it. Revise your standard advertisements to feature the strengthened copy.|
|Strengthen your offer.||Create an offer that’s too good to refuse – not for your entire target market, but for your ideal customer. How can you cater to their unique needs and wants? What will be irresistible for them?|
|Refocus your direct mail campaign.||If you’re sending your direct mail to entire postal code areas, stop and refocus. If your distribution area is that broad, chances are the copy on your postcard or letter is too broad as well. Brainstorm ways to narrow your distribution and only hit your target audience. Purchase consumer lists based on demographics, not just location, or limit distribution to specific housing types. Of course, make sure you rework the direct mail piece to feature your marketing message.|
|Let your target market’s behaviors dictate your distribution plans.||As I discussed above, the more you can tailor your strategy to the needs and habits of your target market, the strong your results will be. Look for opportunities in your existing direct mail, advertising, flyer drop and other strategies to get specific. Narrow the demographics of your list, or place an ad in a niche publication. Brainstorm new ways to target your market’s emotional reactions.|
|Tap into low-cost advertising.||Advertising in places like the YellowPages, CraigsList, classifieds sections, e-mail newsletters, Facebook Ads and Google Adwords can be a great place to test your marketing message for minimal investment..|
|Look for some referral business.||Referral business is desirable because it usually brings qualified leads into your business. Someone has referred them to you based on a current need or desire.
> Provide your customers with an incentive to bring business to you. Reward successful referrals with discounts or gifts.
> Create a referral chain by giving each new customer three free coupons for products or services that they can give to their friends. When their friends come into your business, do the same.
> Create complementary alliances with non-competitor businesses with the same target market. Cross-promotion or cross-referral strategies will benefit both businesses.
|Website sign-up||Add a feature on your website that encourages visitors to sign-up for newsletters or other communications. You can also set up your website so that potential customers need to fill out a simple form before they have access to “free” information.|
Stop using lead generation strategies that don’t work.
Now that you have a comprehensive lead tracking system in place, you’ll be able to track the leads that each strategy is responsible for generating.
When you complete your first few campaigns with the lead tracking system and analyze the numbers, compare the results to the initial predictions you made. Were you correct in your assumptions, or were you surprised by how things shook out.
The purpose of testing and measuring using a lead tracking system is to figure out which strategies work, and which don’t, as well as which strategies work best, and which generate mediocre results. This not only will save you money but is incredibly useful information to have when developing marketing budgets and, of course, trying to drive sales.
READ THIS: A quick cautionary note on conversions.
While the focus of this post has been lead generation, remember the first part of the formula:#leads x %conversion rate = #customers. Don’t lose sight of the relationship between leads and conversions in the overall formula.
Remember… when more leads start flowing through your door, you’ll need to have the resources and systems in place to give a high level of customer service and to convert them into loyal customers. You’ve put effort into generating these qualified leads, but if you don’t have the resources in place to give them the attention required, you’ll lose them.
Once established, your lead tracking and lead management system should require minimal time investment…if you keep it up to date.
One last reminder before I sign-off – keep your systems up to date. The biggest pain (and drain on time) is having to go back and enter heaps of data into your database or management system because someone has let it pile up.
It’s also a huge missed opportunity! If you fall behind on your lead tracking system, because you won’t be able to effectively evaluate your campaign or strategy. Or, you may have missed a lead because you didn’t follow-up soon enough.
Be diligent, and set a strong example for your staff members.
P.S. Everything you’ve ever heard about lead generation is wrong! Learn how to generate all the leads your business can handle…WITHOUT spending a cent on marketing or advertising. Want to find out more?
Reaching your Big Fish
In the last post we talked about how to learn about your big fish and prepare for the first contact you’ll make with them. This first contact is essential to your success. You need to instill confidence in them. They need to know you can fulfill exactly what you are offering on time, at a good price and at the quality you promise.
Today, we’ll actually go through the big approach and how to make that perfect first impression. Before you put together your approach plan, you need to choose with big fish you’re going after. Take a look at your notes and the research you’ve done about prospective fish. Then decide which one will be the easiest approach to start out with.
There are a series of things to go through in choosing which fish to start with. They are:
- Position Your Business
- Compile Your Hit List
- Select the Best Target
Position Your Business
You need to position your business to make the first move by listing your revenue streams, id and list your operational procedures, where your fish is initially positioned, your big-customer research, and putting it all together.
Compile Your Hit List
Start with a list of all the companies you’ve been considering. Then narrow it down to the ones who know could use your products or services. Don’t overlook obvious choices, whether they are big or small. Even small companies could be big fish in the future.
Select the Best Target
Once you’ve got your list narrowed down, you need to decide which one is the best fish to start with. You need to consider a couple of things:
- Which have the most purchasing resources to spend?
- Does their company vision compliment yours?
- What are their employee incentive programs as they relate to your products/services?
- What’s the company’s real need for you?
- Will the partnership lead you off-course?
Now you should have a target in mind to start with. It’s time to plan your approach and execute that plan.
Here’s the step-by-step plan to help you make a good first impression:
- Build and analyze your database. Divide your leads into three different categories: hot leads, great fits and secondary leads.
- Send out introductory mailings to your target to introduce yourself, your company, services, products, and vision. They need to be short, clean and concise.
- Follow up with your first phone call 2-3 days after they would have received the mailings. During the phone call find out whom you need to be speaking with in the future and try to set up a meet with the right person.
- Follow up your phone call with another mailing thanking them for taking the time to speak with you and offer more details about your products/services. Use this letter and opportunity to set up a meeting to do a presentation.
- Follow up the letter with another phone call a couple of days after they would have received the letter. This phone call is to help you further develop your relationship with the prospective client. You should also be able to set up a presentation meeting with them.
- Call again a week later if they haven’t agreed to a meeting or presentation. Ask if they received your creative letter (the second one) and if they have a minute when you can stop by and introduce yourself in person.
Now, don’t be upset if you don’t seal the deal right away. Some people simply take a little longer to woo. This can all be a little intimidating at first, but when you know you are offering a quality product/service, you can’t go wrong.
Once you’ve gone through this process and make first contact (and hopefully a good first impression) it’s time to put your best face forward, which means sending the right salesperson to seal the deal.
If you need help putting together your approach and make a good first impression, try our FREE test drive to work with a coach and have access to a wealth of great resources and tools.
I’m going to talk to you today about how to increase prices without losing sales.
This is a question I get asked all the time so I’m just going to show you how to do it. I call this Dollar Sign Math™ because when I was growing up my dad used to say that he could do any math as long as you put dollar signs in front of it.
I know for a lot of business owners math isn’t always the most fun thing to do so today we’re going to make it easy and put dollar signs in front of it
First, I want to remind you about my Five-Step Profit Formula:
- More Leads
- More Conversions
- More Transactions
- Higher Prices
- More Profits
The most important thing about increasing prices is to make sure that you’re demonstrating value. When your product is more valuable than other people’s (all in the “eye of the prospect!”) then you don’t have to compete on price. So the easiest way to increase your profitability is to raise your prices.
A lot of businesses have never raised prices partly because they’re afraid they’re going to lose customers. The danger of that, of course, is that if you don’t raise prices as you go, you fall further and further behind and end up with a whopping big price increase. Your customers are going to be really mad at you and many will start looking around. Most people can handle a little bit of a price increase – we all deal with that every day so focus on small, regular price increases
Let’s take a look at an example with nice round numbers because it’s Dollar Sign Math and that makes it easier…
If we sell something for $100 and we have a 30% margin it means that we get to keep 30 dollars of every sale and 70 dollars goes toward the purchase of the item. If we increase our prices to $110 – just a 10% increase then your profit jumps to $40 and you get to keep the additional $10. That extra $10 profit is a 33 percent profit increase
If you want to make $1,000 in profit and the sales price is $100 each you would need to sell 33 1/3 of your product whether it’s widgets or hours. But if you increase your price by 10% you only have to sell 25. $1,000 divided by $40 means that you have to sell 25 of them
It also means that you would have to lose 25% of your customers over this 10% increase and you’d still be at break even. That’s not going to happen.
You may lose some people and, hopefully, those are the people that are already taking up a lot of your time or causing customer service problems. Your very best customers are probably not going to leave because of a 10% price increase. And when you do increase your prices, you want to demonstrate your value again. You want to remind them of all of the things they get when they work with you.
Discounts are Dangerous
Now, let’s talk about what effect discounts have on your bottom line. Most businesses will do discounts at least once in their business life! Let’s do the Dollar Sign Math on discounts.
If you sell your the widget for $100 with a 30% profit you’re going to keep $30 and you’re going to pay out $70. But, if you discount it by 10% and you sell it for $90 you still have to pay $70. You’re only making $20 in profit instead of $30. It’s hard to make that up just with selling more.
As we saw before when you want to make $1,000 at $100 you have to sell about 33 widgets or 33 hours but if you discount it by just 10%, you have to sell 50 widgets or 50 hours. Those of you that are working by the hour would have to sell 50 hours in order to make that $1,000 which is a 50% increase over the 33.
Hopefully, you can see the danger of discounting even 10%. However, even if you discount by 10% it doesn’t mean very much anymore. Most people won’t pay attention until you start discounting 20-40%. If you discount that much, you’re creating a false sense of what is a real price. If people know that they can always get it at 20-40% off, that becomes your new price.
Think what that does do to your bottom line! How many more hours you would have to work if you discounted 40%? We’re not going to do those numbers because I don’t want you to even think about discounts like that.
The key to increasing your profitability is offering more value than your competition so they’ll pay twice the price. If they believe they’re receiving a lot more value, you won’t need to use discounts or destroy your margins. If you’ve discounted before, you probably know you won’t necessarily increase your revenue and you’ll often get the people who really just want the discount. This is the “curse of Groupon” – discount your core product and that becomes the new price.
Remember, if you discount even just 10% you may have to sell 50% more to break-even.
If you’d like to talk about Dollar Sign Math and your business or see if I have anyone in my network who could use your services schedule a short call with me and we’ll see if we can get you hooked up with some people, get your prices and profits going up so you’ll have more money to take home!
The first thing you need to do is to identify who you would like to create a Joint Venture with and then create a list of those organizations/people you would like to contact. You can then do one of four things:
- Phone them
All business owners should be interested in improving their business. By picking up the phone and making an appointment you can then create an opportunity to talk face- to-face.
Be brave enough to simply drop in and speak with your prospective Joint Venture partners if possible. They may not have the courage to make contact even though they like the idea of forming a Joint Venture. Don’t hesitate to approach other businesses you feel would be a good match and do not by myopic and only joining forces with local businesses. The internet is Global so take advantage.
- Direct mail
Send a letter inviting them to a meeting or industry night to discuss potential Joint Venturing. This is a great method of introducing yourself and your company to a group, especially as many business owners are often busy during the day but may be prepared to come after hours to a seminar or workshop.
Why not place an advertisement in your local paper or industry journal seeking out potential Joint Venture partners? You can reach a wide cross-section of people at once and it can prove to be highly cost-effective.
If you’d like to find out how Joint Ventures could help you grow your business, get in touch with me.