If you are still asking why are we talking about cash flow management in your business, your accounting books must be doing great! In November 2019, Elon Musk lost $768 million in one failed experiment of armored truck. Well, he can afford it!
Can your business handle a financial setback?
Be it Singulation burning $30,000 in 10 months or ToyGaroo losing a whopping $250,000 due to poor investment choices, you must have read stories of businesses failing due to running out of money.
Every industry is flooding with new businesses and it’s high time for you, as a business owner, to strategize cash flow management of your company to keep it running. The idea is to strike a balance and have a futuristic approach to every cent of profit or loss your company faces.
I’ve prepared a list of tips you can use to ensure that the cash inflow of your business supersedes the cash outflow of your business at any given point of time. Are you ready?
Play the Marketing Card Right!
Every business out there is investing in marketing but playing it right for your company matters a lot. Many owners come to me with marketing problems in the lines of ‘My business getting a lot of attention but the conversion rate is not pleasing.’
The reason for this is quite simple. The marketing of many companies is inspired by superhit campaigns of popular brands. There’s a thin line between “traffic” and “meaningful traffic”. Business, nowadays, are struggling to draw the difference between these two!
While maintaining the uniqueness of your company’s marketing, you have to ensure that you don’t spend a fortune on branding and customer acquisition. Thomas Evans, founder of the startup – Mongoose Cricket, had to shut down his company after spending $130,000 on glitzy marketing.
Always remember the 5% rule! Keep the marketing budget of your business within 2-5% of its sales revenue. Find a way to organically improve the visibility of your business. Optimize sales funnel to make the most of your current marketing campaigns.
Define your target audience. Use Social Media. Enable Smarketing.
Invest in Infrastructure
44% of businesses plan to invest in updating their IT infrastructure in 2020!
The disruption of the current market has made it mandatory for businesses to keep upgrading their services and products. Besides this, updating your company’s infrastructure always has a positive impact on the net productivity & security of your business.
The biggest risk in today’s digitally evolving market space is standing still! Leverage the latest technological advancements to improve the efficiency and reduce downtime of your manufacturing unit.
For instance, the global automation industry is expected to reach $238 billion in 2021. Investing in the automation of your business processes can benefit you with excellent ROI.
You, as a business owner, should never miss the bigger picture. Adapting to the changing market needs to improve consumer experience and reduce manufacturing costs is critical. The idea is to make sure cash inflow is always more than the cash outflow of your company.
Staff Augmentation – Wearing Boundaries, Increasing Profits
Irrespective of your company’s size, your workforce’s quality affects the end product and consumer satisfaction to a great extent. Investing in employee training has shown promising results for many companies. U.S. companies spend $70.65 billion in training their employees!
But, does this investment guarantee boosting the cash inflow of your business? According to a recent survey, 85% of employees are not happy with their jobs. Honestly, investing in training employees seems like a risky affair to me!
No wonder, companies are moving towards alternative flexible solutions like outsourcing and Staff Augmentation. With the global market size of outsourced services reaching $85.6 billion, Staff Augmentation has become the most cost-effective staffing solution for small as well as large scale businesses.
Reward Customer Loyalty
The disappearance of 77% of brands won’t affect their consumers.
Shocking, right? I assume that you wouldn’t want your company to be one of these brands. Investing in consumer engagement & retention has proven to be an effective way to boost cash inflow.
A loyalty increase of 7% can boost lifetime profits per customer by as much as 85%!
Rewarding consumer loyalty not only builds a loyal customer base but also encourages your target audience to use your services & products. Invest in meeting the changing needs of your consumers and significantly boost the cash inflow of your company.
Cash Flow Management – The Urgency
In today’s super-competitive market space, you must take proactive steps to maintain a consistent cash inflow in your business. Start using the above-mentioned tips of cash flow management in your company today and position yourself on the winning side of this game!
Kritika Saxena is currently heading the marketing division at Resourcifi Inc. Having a corporate experience of more than 5 years, her interest has always been into marketing and creating engaging content. Being a reading enthusiast by nature, it has always come very naturally to her. You can often find her reading up on Entrepreneur and Techcrunch to remain abreast with the global trends in business. LinkedIn, Facebook, Twitter