The third article of our cash flow series will explore three more strategies and useful tips on how to improve and maintain a positive cash flow for your business.
In this article, we’ll examine three new strategies that can not only help grow your business but will greatly improve your cash flow while doing so.
- Monthly Subscriptions
- New Product Development
Let’s examine these strategies further:
Monthly subscriptions (instead of annual payments) can really improve your cash flow on a month-to-month basis. Especially if you need cash fast!
It won’t be as large of a lump sum, but by avoiding the yearly discount you’re able to collect more in subscriptions from a single customer than you otherwise would be able to.
Many services offer a heavily discounted annual fee. By switching to monthly you’ve now guaranteed a monthly payment from all existing customers (so cash flow all year round) and you are able to charge a slightly higher amount monthly in order to cover things like new product developments, employees/hires, customer support and more!
Cost-cutting takes a long time and a lot of financial exploration to find areas where there is an opportunity to scale back, but it’s required in order to manage cash flow properly.
By working with your accountant to find areas the business is overspending or not reaping as much benefit as others, you can eliminate huge money-suckers and increase your cash flow for the year (simply by not spending).
Part of cost-cutting is also evaluating day-to-day tasks for efficiency and effectiveness. Not only can this strategy help you to identify potential inefficiencies within your business unit, but it can help you to improve your processes and make your organization more efficient, overall.
New Product Development
By bundling existing products and services that complement each other, you can use this as a way to create a “new product” or offering. This is a good reason to reach out to your customer groups who are currently using any of the products in the bundle and potentially upsell them to a higher bracket.
This will be seen as a value-add to your customers, and a way to increase the average order size (and therefore, cash flow) for your business.
You’ll be doing customers a favor by bundling some of their favorite services or products together (so they save a little money and are getting a deal) but you’ll also be squeezing more out of each customer because they may not have bought both items for the full price initially.
These three business development strategies are all great opportunities to improve customer relationships, communications, and identify and solve inefficiencies (in order to provide better service in the long run). All while improving your cash flow!
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