A key element of healthy cash flow is making sure you have enough money coming in. But how can you boost that if you need to? Emma Warren is a business expert, entrepreneur and managing director at Portfolio Directors, which advises growing small firms. Here are her tips on how to boost profit:
- Manage your suppliers. Don’t be afraid to ask for a discount to boost your profit but don’t be so ruthless that it affects your relationship. Negotiating cheaper delivery slots—away from peak hours for instance—is often a good way to bring down costs.
- Manage your cash cycle by keeping accurate sales records. That way you can keep profit margins high and spot problems early on. Raw material prices going up might mean you need to increase your prices, for example. Or you might need to run a special promotion in quieter months.
- Talk to customers and suppliers to find out the latest innovations and trends and what’s “hot.” Be super alert to new ideas and what’s selling well in your sector—can you piggyback in some way?
- Make products and services repeatable wherever possible. Even if you have to discount to achieve this, it’s usually worth it for the cash flow benefits. For example, if you’re a training company selling to corporate clients, offer a mixture of training and coaching over a six-month period with a regular fee each month, rather than just a one-off session.
- Encourage customers to commit to a purchase every month either through an email alert or newsletter featuring your latest ranges. Better still, gear it to your customers’ individual tastes and buying preferences.
Remember, it’s cheaper and easier to keep customers than it is to set out to attract new buyers. Try these tips today to start taking full advantage of the customer relationships you already have—and to start seeing the benefits in your bank account.
For more info on managing your cash flow, like avoiding a cash flow crisis and how to ask for payment, download our free “Manage your cash flow” ebook now.