Cash flow have you thinking

by Christopher de Zeeuw on October 27, 2014 No comments

The first time I read this article I really thought they had over simplified the process and being an accountant we tend to understand that things are not always this simple! However I have just completed the brilliant 2.5 day sales workshop with Barry Mitchell – Explode your revenues – and with retrospect I think this is a great article for all SME’s to read and ensure that there is sufficient focus on your marketing strategy and route to market.

The big assumption in the article is that you have a sound / profitable business case and by focusing on bringing in the revenue at the right margins you will be able to generate some good cashflows.

I think the risk most business face today is not the inability to get their brand out there to help grow revenues but more about where to get their brand awareness. Modern social media allows one to present focused adverts / customer interactions at very low cost and if done correctly this will greatly assist you in building a funnel of leads and potential customers. The key is choosing the correct medium that your potential customers will be using.

A business’s purpose is to make money however their objective should be to find and retain customers!

The SME Challenge – Cash Flow

Author: Russel Bason
I have always thought that cash flow is king. After all this seems to be the traditional wisdom as I understand it. There are plenty of statistics showing how poor cash flow leads to business failure.
However I was given a new perspective by a short and impromptu presentation given by Michael Andrew of Action Coach. The blinding flash of the obvious (as Michael likes to put it) was this;
the problem isn’t cash flow, the problem is a lack of sales.

Let’s think about that for a second, the problem is sales. If you have more sales then as an SME you’ll have more cash and therefore fewer cash flow issues. It just so elegant.

Now I don’t want to minimise the balancing act that all businesses, but especially SMEs, go through in balancing the books. Often an increase in sales comes with an increase in associated costs as well; especially if you’re selling a low margin product. However, assuming that as a business owner you have sufficient technical experience in your chosen field if business to implement efficient business processes, your chief challenge is to generate sales and by extension manage a shoe string marketing budget.

Large corporations spend enormous sums of cash on creating brand awareness and for a very good reason; brand awareness increases sales. However many SMEs cut their marketing budget to save costs which makes it extraordinarily difficult to generate sales, which in turn deepens the cash flow crisis. However by doing a little digging there are many effective ways to get your brand out there at an affordable cost.

Facebook, Linkedin, Twitter and Google Plus all come to mind immediately. It doesn’t cost anything to join and an SME can expand their reach on these platforms at a very low cost. In addition, by contributing on these platforms and being an active presence an SME or business owner can get their brand out there for no more cost than the time it takes you to contribute.

So let me conclude here with a short blinding flash of the obvious; when preparing your business plan make sure you have an effective marketing strategy in place and grow your sales. You’ll solve a world of cash flow problems.

FULL ARTICLE

Christopher de ZeeuwCash flow have you thinking

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