Author: etcwebsite

Managing your cash flow will help keep your business afloat and even become more profitable. But how do you do it effectively?

In my previous post, I explained how focusing on cash flow rather than profit is more important in a small business. Essentially, a P&L won’t tell you what’s in the bank, and if you don’t have money in the bank, you can’t operate. Here are 8 ways to keep cash your cash flowing:

1. Establish payment terms and stick to them

Being clear on your payment terms at the outset will aid cash collection. Not doing so makes it very difficult to determine when a payment is overdue, and to subsequently chase it. My blog on crafting great clients has more tips on this.

When payment terms are defined, don’t be afraid to chase payment. It’s your money after all! For your slower clients, why not send a reminder when the due date is approaching to increase the likelihood of on time payment.

2. Do your invoices

Sounds obvious doesn’t it! However for micro businesses with few employees, the main focus is on getting the job done; invoicing is often at the bottom of the priority list. While it’s great to be busy, remember cash is king and if invoices aren’t done, you will run out.

It goes without saying that the sooner you get invoices in, the sooner they’re likely to be paid. Not only that, invoicing in a timely fashion is good customer service and helps your clients manage their cash flow too.

3. Retainers

For frequent repeat clients, you can save time and improve cash flow management by offering a retainer. In doing so, invoices can be automated and payments received up front. Talk to your accountant about the best software solution for this.

Your client will benefit too, their expenditure will be clear and your service to them guaranteed.

4. Faster payment incentives

Where retainers aren’t viable, you could offer a discounted rate for invoices paid within a certain timeframe. This will act as a great incentive to your client and improve your cash flow.

5. Spend wisely

As mentioned in my last post, when you monitor cash flow you’ll see exactly where your money is being spent. Use this information to evaluate what you’re buying, is everything necessary and are you getting the value you expect from services? My blog on cost cutting has more on this.

6. Stock control

If your business uses materials or requires you to keep products in stock, review how much you hold. Excess stock will tie up your cash so ensure you don’t have more than you need.

7. Improved credit terms

When you take on a new supplier, negotiate on payables. Some businesses will agree to 60 or even 90 days!

8. Cash reserves

With all these points in play, my last tip should be easier to achieve and that is, to create a cash reserve. Every business has quiet times but effective cash flow management and a cash reserve will help manoeuvre these.

As ever, if you’d like help to implement any of my advice, why not contact me to arrange a Free Business Review? This is a genuinely free 2 hour session whereby I’ll come into the business and spend two hours giving you advice to make positive changes. Click here to arrange yours now.

Without cash, wages won’t get paid, suppliers won’t supply and your business won’t run. For a small business, cash is king.

Managing cash flow

On a day to day basis, small businesses should be managed according to cash flow and not the P&L. I’ve been into so many businesses that are profitable on paper, but have no money in the bank and are therefore struggling to operate.

Using a cash flow statement will tell you exactly where you’re spending your money, unlike a P&L. If you increase customer credit for example, this affects cash flow, but wouldn’t show up on a P&L. Likewise, buying equipment will  impact short term cash flow (as shown on the statement) but may not affect overall profitably on the P&L.

Creating cash

Another benefit of using cash as the business driver is that you can use the knowledge to create even more! Understanding where you’re spending can help you cut costs. Likewise understanding where your money is generated can help you increase activity in that area to make more sales. Again, looking at the P&L won’t highlight these opportunities.

Take a look at my recent post on cost cutting here, and also profitable marketing, here for more advice on this.

Bookkeeping software

So the benefit of concentrating on cash flow is clear, but how? Simple bookkeeping software like Quickbooks or Xero allows you to track money in and out, as well as providing cash flow reporting. You can even link them to your bank accounts to make life easier.

Your accountant will be able to advise you on a good solution for your business and likely show you how to use it to your advantage.

Read on to my next blog to discover more effective ways to manage your cash flow.

If you’d like help to implement any of my advice, why not contact me to arrange a Free Business Review? This is a genuinely free 2 hour session whereby I’ll come into the business and spend two hours giving you advice to make positive changes. Click here to arrange yours now.

As a business to business (B2B) company, a marketing calendar is essential for the effective delivery of your marketing strategy.

What is a B2B marketing calendar?

In my previous post, I explained that a marketing calendar is way of organising your marketing activity throughout the year. It doesn’t need to be fancy, an excel spreadsheet is perfect and allows you to update as you go.

In this blog, I focus on things to consider when planning your B2B marketing calendar. If however you’re a B2C business, you can skip to my previous post here, written specifically for you.

Industry peaks and troughs

In your business you’ll be familiar with your own natural peaks and troughs so take these into account when planning your marketing activity for the year, remember you’ll need to have tactics in place to combat the troughs well in advance, so when you get there your order book won’t be empty.
Industry events

Don’t forget to include any events or trade shows you take part in within the calendar, ensure you have your actions prepped so you’re ready in time and avoid the last minute rush.

The B2B buyer

When thinking about how far in advance to complete marketing actions for a particular event or season, remember that a B2B buyer is more cautious and takes longer to make a decision than a B2C buyer. In addition, there may be internal hoops to get through before approval is given to buy your goods or services. So ensure campaigns kick off early enough.

Repeat purchases

Although a B2B business may take a while to make a decision, once they’ve made a purchase with you they are more likely to use you again. Retention campaigns throughout the year will be vital, after all it’s easier to keep an existing customer than find a new one.

Other resources

For more advice on marketing activities and how to beat the troughs, see my posts linked below.

Profitable marketing
Diversification: 3 ideas to increase sales

But whatever your business, the old adage is true. If you fail to plan, you plan to fail.

If you’d like help to implement any of my advice, why not contact me to arrange a Free Business Review? This is a genuinely free 2 hour session whereby I’ll come into the business and spend two hours giving you advice to make positive changes. Click here to arrange yours now.

Have a great month!

Yes, is the answer! Whether you trade as business to consumer (B2C) or business to business (B2B), you absolutely need a marketing calendar.

What is a marketing calendar?

A marketing calendar is way of organising your marketing activity throughout the year. It doesn’t need to be fancy, an excel spreadsheet is perfect, allowing you to update as you go.

In this blog, I focus on the B2C marketing calendar. If however you’re a B2B, you can skip to my second post here, written specifically for you.

How far ahead should my marketing activity commence?

In B2C businesses, having a calendar is particularly relevant to enable you to plan campaigns around seasonal events such as Easter, summer and Christmas. A retailer will know when they need to be marketing for any given event. Wholesalers will be marketing even earlier to serve those retailers.

As a rule of thumb,your activity needs to commence 3-4 months ahead of when you want the business. Retailers will start their Christmas campaigns in September to catch the early birds, with wholesalers marketing their goods in the Spring. For Easter, those eggs will be in the shops right after Christmas!

Don’t forget the troughs

Not only will your calendar ensure you make the most of your peaks, it will also highlight times of inactivity. Fill those times too! My previous blog about diversification has some great ideas on increasing sales in your slower times.

One of my clients is an English language centre, typically their quieter months are December to February. To combat this they promote a winter buy one get one free offer at the end of the summer. Kicking off this campaign early ensures they don’t arrive in winter with no bookings.

In practice

So it’s clear that for marketing to be effective, activities should be planned in advance. Using the spreadsheet, detail individual tasks within your campaign, when they are to be completed and by who. By planning your marketing activity in this way, you’ll be able to plan your resources so that everything happens when it should. It may take some time to compile, but it will keep you on track when it matters.

The old adage of failing to plan means you plan to fail is never more relevant than here.

If you’d like help to implement any of my advice, why not contact me to arrange a Free Business Review? This is a genuinely free 2 hour session whereby I’ll come into the business and spend two hours giving you advice to make positive changes. Click here to arrange yours now.

Have a great month!

Many of us are back to work following a well earned festive break. I always claim that a holiday is great to focus the mind and bring new motivation. Hopefully you’re experiencing this now, with plans for change or improvement both in your personal and business lives.

What’s less common though, is the structure to ensure those changes or improvements happen with results. In my blogs this month, I’m sharing my two crucial stages to turn that around.

Don’t curb your potential!

In this first post, I’m looking at effective goal setting. You have to have an end goal before you can achieve it. Otherwise how do you know what to aim for; or what’s a good or bad result?  For example, a runner may want to improve their time; but without a definition of by how much, there can be no plan and without a plan, the potential for improvement will be curbed.

Step 1 – the personal goal

Aligning business and personal goals is pivotal to your well-being. If the business has hit its targets but you still haven’t enough money to get the new car or pay off the mortgage, then as a business owner you’re likely to be left feeling dissatisfied.

So for effective goal setting, it’s imperative to work out first of all what you want from life. This may be a long term retirement plan, or it may be a medium term plan to pay off the mortgage. For some of us, there may be more immediate, short term life goals such as the new car.

Step 2 – the cost

Once you have the personal goals defined, you need to know the cost. Do your research and work out exactly what’s required. If it’s a new car, don’t forget to include insurance and road tax. Maybe you want some cash saved for wear and tear on tyres or a monthly valet. Get it all down.

Step 3 – the business goal

OK, now you know what you want the business to achieve for YOU, and what it will cost. It’s time to set the business goal to help you create the reality.

For medium and long term personal goals, you’ll likely need to break the overall goal down into annual targets. From your annual target, monthly targets can be set.

With effective goal setting done, you can move onto the plan. Read on to my next post for the detail on how to ensure you can achieve the targets you’ve set. As ever, if you need any help with your goal setting, contact me for a free 2 hour business review.

So you’ve got the goal in mind, how will you score it?

In my last blog, I explained why having a goal is central to your overall well-being and the steps needed to getting the right goal. You can read that detail here if you missed it. In this blog, I’m giving away my blueprint to achieve business goals you’ve set.

1. Break it down

With your goal for the year in place, you’ll need to break this down into at least monthly targets. In doing so, you can put a plan in place to get there.

2. Match review

Just like a football manager, you’ll need to make changes in order to climb the table and hit your goals, but which ones? My previous posts are full of ideas to grow your business. I’ve linked below to some that I believe will really guide you to carve a plan to achieve business goals:

Profitable marketing – discover what’s working well and do more of it!
4 tips for effective cost-cutting – send more money to the bottom line by cutting out unnecessary costs
Diversification: 3 ideas to increase sales – understand how to use your products/skills to the max in all markets

3. Plan your attack

With ideas sorted, document your plan. Just like your targets, break your plan down into monthly actions. Remember to include the following:

Task
Who (will be responsible for completing it)
When (should it be done by)

4. Team talks

As a small business owner, you’re likely accountable to very few people. One of the problems with this is that it removes the gravity of the result and the priority given to the tasks to make it happen. If no-one but you cares whether you achieve the goal you’re less likely to give your plan the attention it deserves.

Fear of failure can prevent us wanting to share with the world what we are aiming for. For those brave enough to do so, it can be the motivation to ensure failure isn’t an option.

If you have a team, share with them the business goals (they’re probably less interested in the new car you’re after!). If they don’t know what you’re aiming for they won’t strive to help you get there. Think about what might motivate them to achieve the goal, can you put an incentive in place?

If you don’t have a team then share your goal with a family member, other business owner or a coach. Ask them to make you accountable and provide them with monthly updates on progress to keep you on track.

5. Check the scoreboard

Don’t forget to keep checking the scoreboard to see how you’re doing. Monthly progress checks will give you the opportunity to make adjustments to stay on track. More importantly, it affords you an opportunity to celebrate successes. Not only does knowing you’re on track make you feel amazing, it will keep motivation and momentum up.

6. Goal celebration

Reward and celebrate your wins. This goes for you and your team. Give yourself a little treat when a target is reached, that too will help keep your motivation high. For your team, how can you thank them? Often praise itself is enough to let staff know they’re appreciated.

No matter how well your business is doing, you’ll always strive for a bit more. Whatever your position, why not take advantage of a free 2 hour business review with me and really kick-start 2018? I’ll leave you with genuine ideas on how to improve your business so you can achieve those personal goals.

As 2017 draws to a close, have you got your plan for the New Year? Here are my top tips to get 2018 off to a flying start.

Set your goals

If you haven’t yet set goals, set aside some time at the beginning of January to plan and prepare them. Without goals you’ve nothing to work towards or compare results against. Look out for my blog next month with tips to goal setting and achieving.

Relax and recoup

If you are able to take time off over the festive period, do it! Take the time to relax and recoup and don’t feel you have to work. Taking a break will give you renewed energy for the year ahead.

However if you simply can’t bear to take time off over Christmas but expect to be quiet, use the time wisely to plan for the coming year.

Retailers

Of course, if you work in the retail industry then Christmas and the following sales may leave you snowed under. If that’s the case, take some time off later in January when the pace quietens.

Merry Christmas

So if you can, rest, enjoy your Christmas and get back to work in January feeling refreshed and ready for the year ahead.

From myself and all of us at Executive Training & Consultancy, have a very Merry Christmas and a prosperous New Year.