Even if you are making a profit the cash often sits on your balance sheet and cashflow is still an issue, but there are some simple ways of turning your profit into hard cash
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Often in business your profit and loss statement tells you that you’ve made a profit…but when you look at the bank balance and there is no cash to be seen. So where is the cash in your business? How can you improve your cashflow? The answer is often that it’s on your balance sheet.
The balance sheet lists your assets and liabilities, and it tells you what you’ve done with the money. But when you are looking for quick cash, a good place to start is to look at what you’re holding in stock that you could sell off quickly. Who owes you money that you can collect sooner? What are you holding in other assets that you could sell and turn back into cash?
Who owes you money?
One of the quickest, easiest ways to get cash in is to look at who owes you money. Get your debtors’ list out, jump on the phone and get the money into your bank account. I worked with an electrician and we brought $50,000 of outstanding cash into their bank account in two weeks, just by pulling out the debtors’ list and turning it into cash.
Turn to your database
Next investigate how you can generate more leads and more sales. Look at your database of existing clients and prospects, and draw up a list of everyone who has bought from you in the past –all those names sitting in your financial package or customer-relationship management system.
When was the last time you actually invited them to come back? Sending out an offer to your current database, talking to them and inviting them to come back to do business with you again can generate quick cash. Set an offer with a time limit on it and that can bring cash into your business immediately.
Improve your conversion rate
Another way to get quick cash is to work on your conversion rate. You’re already getting the enquiries via incoming calls, visitors to your website or referrals. How do we turn that into cash? That relies on what you are saying to the customer. Are you asking for the sale? Are you engaging them in a conversation?
Another big factor in getting some quick cash is actually following up your outstanding quotes. Often, a quote is just sitting there and you haven’t had the time to follow up because you’re dealing with the next customer. A lot of cash could be sitting on your desk, in your computer, sitting in those quotes that you just need to convert now. Have a reason to contact them – re-engage, reconnect and turn the quote into a sale. One business I worked with increased their conversion by 10% just by having a regular, consistent follow-up process on all the quotes they sent out.
Put one of these top cashflow strategies in place in your business this week and you’ll start to see a fuller-looking bank account before you know it.
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