Cash Flow is the Small Business Killer
How many of you who are in small business have a problem with your cash flow?
As many of you yell out a resounding YES, I advise that you keep reading for some tips on how you can improve this issue in your small business.
Cash flow is the small business killer because so many people forget to run their business in a way that promotes the idea of money coming in regularly. Small Business owners are just so busy riding the big roller coaster that they forget many important things that could help.
Assuming you have created a budget, (If you haven’t – get to work) you should now know how much you need to generate in sales to be a viable business. By viable business, I mean that the sales you generate are meeting the goals you have for yourself and for your business. This amount is different for everyone – some small business may have the goal of $100 per day and others $1000 + per day.
What are your monthly or weekly sales goals?
Remember that sales do not equal profit so using your budget you should be able to determine your profit after your expenses (fixed and variable expenses). Some businesses will have far higher costs than others, so again your business is different to others.
One key is regular income
So regular income means that you have money coming in each week, month or quarter that you can expect and count on.
How can you create regular income in your business?
Here are a few simple ideas based on different business types.
Accountants – get your clients on a monthly retainer, this way, instead of receiving the money once each year you have a flow throughout the year and your clients don’t have a big bill.
Bookkeepers – just like accountants you can have regular income each month
Car Cleaners – Set your clients up on a regular booking schedule so that you remind them and book them in.
Dog walkers – This is an easy one but perhaps offer a discount for them to direct debit and lock into a monthly debt.
Electrician – Invest in a professional website, less than 50% of tradies have one. Don’t just set and forget, make it work for you. Send your clients reminders about smoke alarms and other electrical requirments throughout the year.
Food Supply – Weekly or monthly subscription is very popular for delivery straight to your clients doors and your income is regular.
Gifts – Offer a reminder service, hamper delivery, email update on new stock, occasion reminder etc.
Hairdresser – Book your clients next appointment while they are there, offer a product subscription, suggest a payment plan.
Jewellery Maker – A professional website will be key, notification of events throughout the year, reminders of special occasions and reasons for people to buy and invest in your pieces.
Knitters – You are running a handmade business and maybe making to order but you can still have a regular income. What item can you make over and over that people want and love that you can sell wholesale to stores all year round or perhaps Northern Hemisphere and Southern Hemisphere?
Lawn Mowing – Make sure you clients know that you will be there each fortnight through summer and monthly through winter, set them on a payment schedule and don’t let them get behind. Using a direct debit system may be key to getting your cash flow even throughout the year, perhaps a weekly payment to make it cheaper for your client and you will do their lawn 22 times each year.
Maintenance company – If you are offering maintenance as a handyman or similar you will be wise to look at working for real estates or similar for a portion of your workload. The chances of you receiving regular work orders can be far higher than you just relying on residential work. Naturally you should have a website and an easy way for people to remember you via a fridge magnet, business card or newsletter that you email them.
Naturopath – Your regular clients should all be signed up to a series of sessions and payments, make sure you book the next appointment after each session and reminder your client of the benefits of your service and the regular treatment you offer.
Optician – Sending out regular reminders for upcoming appointments or phone calls will help your clients to prioritise their eyes. Also, newsletters and information as to why you are their local eye care specialist will help to create a continuity of cash flow.
Plumber – Your regular maintenance work will provide ongoing income. If your clients are real estates or strata companies they will have blocks which will need regular maintenance and then you will have regular cash flow. Be smart and offer a reminder service to them and make sure you have a professional website for them to view your business information.
Quality Assurance – As a consultant you will have regular clients that you see throughout the year, get them on a payment plan or schedule to help both their cash flow and yours.
Retailer – A little trickier but emailing through new products will inspire regular purchases. Think about a subscription service if that suits your business type, they are hugely popular and mean that you have an ongoing income while that subscription runs.
Solicitor – Assuming you are specialising in a legal area then this will be key to how you generate your cash flow and market your service. Often when we have legal work done is has a need to be updated in the future so staying in touch will be key. There is also often reasons for companies to put their solicitors on retainer and this will be a great way for your cash flow to be consistent into the future.
Tyre repair and replacement – This is again a business where sending reminders and staying top of mind with your clients is key, plus having an online presence so people can find you is vital. Think about add-on services like muffler replacement, servicing etc. if that can be a part of your business to help with regular cash flow.
Upholstery repair/replacement – Having interior decorators and designers who regularly come to you with their projects will be key as in conjunction with one off work they will give you a regular level of cash flow for your business.
Vehicle repairer – It is the regular maintenance of vehicles that will keep your cash flow going, have a reminder service for your clients so they never miss their next service or special that you have on offer.
Writer – Writers come in many shapes and sizes with many different specialties such as author, copywriter, script writer and more. You area of expertise and if you can be on a retainer or receive regular work is always different but just like any business you need to get out there and get known. So having a website, social online presence and more is just the start and staying in touch with your clients ongoing means that they will remember you when they need something.
X, Y, Z, Yoga Instructor – Fitness instructors usually get their clients onto a regular debt schedule so cash flow should not be an issue. Here it is important to look at your budget and see that you are doing enough and able to do enough to reach your budget with what you are doing. If you can’t then you need to change things as soon as possible, don’t keep doing the same thing and expect a different result.
Apologies for condensing the last three but I did struggle to find businesses, let me know what I missed.
Just a few ideas and hopefully your business is listed or you can relate to one or more ideas on increasing and creating a regular flow of cash into your business. If you would like more specific advice structured to meet your business needs then get in touch with Kelly at My Sassy Business.
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