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10 Ways to Improve Cash Flow

Just about every business would like to improve their cash flow. Below are ten ways which may help your business achieve that objective rather quickly:

Bill Promptly; Take Advantage of Payment Terms

The faster you can invoice a client, the quicker the clock starts to tick for the customer to pay in order to meet the terms of the contract you both agreed upon at the beginning of the relationship. Conversely, if you’ve agreed to terms of Net 30 with one of your suppliers or vendors, don’t pay the bill immediately; wait a little bit to take advantage of those terms and keep the cash in your (hopefully) interest bearing account a little longer.

Offer Payment Incentives; Penalize Late Payers

Many times businesses set forth payment terms of Net 15 or Net 30, but they neither offer any incentives to beat those terms nor penalties if the terms aren’t met. Consider adding both to your invoices to decrease your accounts receivable days outstanding. Chances are most of your customers will pay promptly if there is an incentive involved.

Run Credit Checks on Potential Customers

While this sounds like a no-brainer suggestion, many businesses today take whatever business they can acquire and run checks only when problems arise. Often times it is too late to run a check after issues surface. It’s better for your business over the long haul to reject a customer immediately that slow pays or is consistently delinquent. Slow payers are frequently troublesome clients aside from their propensity to get behind on paying you—they are typically the impossible to please variety that will nitpick your organization and sap its resources.

Sell off Under Utilized Assets and Fully Depreciated Assets

Once an asset has run through its useful life and is no longer a depreciable asset, consider selling it off if you can get good value for it. You’ll get an influx of cash that can help you replace that asset or upgrade to a new technology or model and possibly reduce your debt in the process. Many assets will last well beyond their useful life so you may be able to fetch top dollar from a smaller business looking to improve their operation by adding used equipment.

Encourage Partial Payments

If your business is in a bit of a cash crunch, try encouraging your clients to make partial payments on the front end of projects or working arrangements. Most will be agreeable to such provided you make some concessions on your end such as small pricing incentive or discount to do so. This helps you improve your cash on hand while helping your client spread payments out so that everything doesn’t hit all at once in one lump sum.

Comparison Shop Suppliers Online

The Internet makes comparison shopping a breeze, and some of your vendors and suppliers may take you for granted by not adjusting their pricing to reflect current market and competitive pricing. By checking the competitive landscape every quarter or so, you can gain some leverage by knowing how much you should be paying for particular items especially those that are more commoditized.

Stick to Budgets

This is another suggestion that may seem rather obvious, but there are several projects that suffer budget creep throughout a fiscal year. A couple hundred bucks here or there may not seem like much for a particular project, but it will quickly add up if there are multiple projects going on across an organization.

Spread Out Payments; Don’t Pay All at Once

Spreading out payments through a month versus paying everything on one day can really alleviate a cash crunch due to the natural flow of business and customers’ payment preferences. All of the money due to you in a given month doesn’t come in on one day so why should all of the money going out? This little tip can save a lot of headaches even though the temptation to pay everything on one specific day to get it out of the way may seem logical at times.

Add a Shift Versus Taking on More Space

A lot of small to medium businesses are quick to add office or production space when it may be more cost effective to simply add another shift. If your business is a morning shift only operation, how much could you save by simply adding a second shift versus adding production capacity? Chances are you could save quite a bit of development and rental costs by better utilizing the space you have today.

Pay by Credit When Possible

Paying by credit seems to have a stigma attached to it, but it can buy you some extra time to stockpile more cash to pay things off if you play the terms correctly. Since there are also some low rate credit options available, it may be more cost effective to take on a little interest expense until the cash reserves are built up enough to pay things completely off.

Cash flow problems don’t have to cripple your business if you take a step back and evaluate your options objectively. Implementing a few of the tips above can improve things almost immediately and put you back on the right track to a positive cash flow.

Posted by Michael Cage on Friday, May 18, 2007

Just because marketing advice is repeated often … doesn’t make it true.

“Find a need and fill it … that is the key to successfully marketing a business.”Someone who needs to be slapped around a little bit.

Truth is, follow this “find a need and fill it” advice and you are inviting commodity pricing.

Think about it…

People NEED to get their roof repaired … but they WANT on-time, courteous service, clean workers and a guarantee their roof won’t leak again.

People NEED a computer network set up … but they WANT someone who understands their business, will suggest things to make it run smoother before a breakdown prompts it, and won’t make them feel stupid by talking geek to them.

People NEED to have a cavity filled … but they WANT to look good and have a pain-free experience in a friendly office with warm people.

People price shop for what they need, and even that makes them grumpy.

People pay premium prices for what they want, and they love it.

Go to an Apple Store. Play marketing anthropologist. Really observe the people. You’ll “get it” in less than an hour.

Service business, retail business, business-to-business, whatever your business…

…if your business struggles with commodity pricing or if you have to “justify” your price more than once in a blue moon … betcha an iPhone (ahem, another example) you are focusing on what your customers or clients need, and aren’t paying attention to what they want. And that makes them begin to not want you.

Forget find a need and fill it.

Find a want, touch your market … and lead a movement.

I talked about this in today’s Aggressive Marketing & Entrepreneurship Daily Podcast (along with a discussion about when to release version 1 of your product or service, true entrepreneurial competencies, and how to stay passionate and energized in your business). If you haven’t listened yet … what are you waiting for? … I’m on Episode #4. (Subscribe in iTunes.)

Eight Weeks To Business Change

by André Taylor

Searching for the right business strategy, many organizations fall in love with big concepts. But for many, it stops there, as “doing” can be an elusive concept. In my advisory work, I suggest a systematic approach to tackling change comprised of an 8-week period of intensive focus, followed by a repeat of the process in 8-week increments throughout the year. Here are the eight big questions to explore during this process:

Week One:

What are the next 5 things we must do to get closer to our vision?

This is the hardest part for many organizations. We often have too many objectives. It is important to have a crisp vision, but even more important is developing a crisp daily focus. This focus should consist of a handful of clear objectives.

Week Two:

If we keep doing what we’re doing will we achieve our vision within our timeframe?

During the first week of our program, you’ve defined your focus and you’ve begun to take action. But once you begin, you are bound to see adjustments that must be made. You must now take inventory of where you are.

Week Three:

“Who are the people and partners best suited to help us reach our vision?”

Creating change in an organization requires the participation of many people with different talents, backgrounds and perspectives. Vendors, advisors, partners, mentors, and customers are all needed and we need multi-generational team members to shape our approach.

Week Four:

What are our potential and current customers saying to us indirectly?

Develop an attentive ear. Your audience is often telling you things indirectly about their likes, dislikes, tastes, and preferences. We may think we’re listening, but instead we are really thinking of our customers as a group, rather than individually.

Week Five:

How do we create a new, distinctive relationship with our audience?

Our objective is to reach a level of interaction with our audience that reduces and ultimately eliminates boundaries. We want to penetrate and understand the customer “psyche” and discover what’s beneath the surface.

Week Six:

How do I move into the view of new customers and partners?

New audiences want to feel like they’ve discovered you. Your role is to help them do this, by moving into their view. By partnering with other organizations, you will expose your business to new audiences.

Week Seven:

How are we managing the natural conflicts and complexities that arise?

Dynamic organizations are comprised of people with differing views, experiences, and competencies. We need a composite of organizational talents to advance our mission. We must also change the perception that disagreement is bad, or that there should be a penalty or stigma associated with failure.

Week Eight:

How do we follow through in the most efficient way?

Today’s environment requires highly focused periods of evaluation, ad hoc teams, a rapid assessment of the situation, and quick decisions. We must also trust individuals with an uncommon understanding of the situation who can “run” with their creative vision.

© Copyright 2007 – André Taylor – Taylor Insight Group, LLC. Go to http://www.andretaylor.com and get Andre’s free newsletter.

André Taylor is an award-winning entrepreneur, author, and advisor to growing companies and one of today’s dynamic voices on business and personal success. He’s the author of a collection of audio and video programs reflecting more than 25 years in enterprise management and the discipline of personal and organizational development. He provides an uncommon understanding of the lessons of business and personal resilience, and extraordinary insight and commentary on the subjects of entrepreneurship, leadership, sales, marketing, innovation, and growth.

Internal Brand Building: Living the Brand

By Derrick Daye on The Conference Board

Increasingly, organizations are finding it critical to gain their employee’s understanding and enthusiastic support of their brand’s essence, promise and personality. They know that they must achieve integrity between what the brand says about itself and how it actually behaves. The bottom line: they understand that consistently delivering the brand promise at each and every point of customer contact is critical to their success.

Organizational Support Critical to Brand Strategy Success
In 1998, The Conference Board conducted a study on “Managing the Corporate Brand.” In that study, they discovered four organizational support factors were critical to brand strategy success.

They are:

•CEO leadership and support
•A distinctive corporate culture that serves as a platform for the brand promise
•The ability to obtain support from a broad spectrum of employees
•The alignment of brand messages across functions

These factors are clearly more dependent upon the human resource function than the marketing function.

The Importance of Front Line Employees
At the Institute for International Research’s December 1999 Brand Masters Conference in Palm Beach, Florida, Sixtus Oechsle, Manager, Corporate Communications & Advertising, Shell Oil Company, indicated that in a study of sources of brand favorability, Shell Oil found that interaction with company employees had the greatest impact (much greater than brand ads or news) on brand favorability. Indeed, most organizations have discovered that the ‘moment of truth’ in the delivery of the brand promise almost always occurs in customers’ interactions with front-line employees.

At the Institute for International Research’s The Branding Trilogy conference in Santa Barbara, California, Kristine Shattuck, Los Angeles Area Marketing Manager, Southwest Airlines put it well when she said, “Enthusiastic employees spread enthusiasm to customers. Market to your employees as much as your customers. If your employees don’t ‘get it,’ neither will your customers.” This can only happen if top management aligns all of its organization’s processes and systems in support of its brand’s promise.

Strategic Planning – The Three Key Elements

For businesses strategic planning is a concept, a mind set and a process. It is looking down the road at what’s around the bend. When everyone around your place is focusing on what’s coming you will all recognize it in time to take advantage of it.

As things appear on the horizon each of you will be asking the question, what’s important about that from your various perspectives. You will be able to articulate the important elements of foreseeable future possibilities so you can all focus on the possibilities each offer. The goal of the business is, after all, to help each of you make your dreams come true.

Strategic planning keeps you focused on the options you now see more clearly, so you can collectively make choices that benefit the company and all of the people involved.

In this brief article I will describe the five key elements of a business strategic plan. It has been my experience that when these three elements are combined into a simple straightforward do it yourself process your company will achieve its goals. This is not rocket science, unless you are building rockets, and will work for companies of as few people as one and as many people as you have on board your company.

Your Strategic Planning Team:
The strategic planning workbooks, textbooks, and how-to books all discuss the importance of the strategic planning team – the implication being that the company must be big enough that there are leaders at every level who can become part of the strategic planning team. Unfortunately that eliminates about 75% of all the companies in existence.

If that includes you do not fear as I am about to show you how you can reach out to the best people possible, individuals with various perspectives whose input will help you create a balanced strategy. In addition these successful people will help you develop and maintain this workable strategy over the long haul. And since they are not going to be charging for their input you will be able to afford an active strategic planning team forever.

I recommend that you connect with members of your industry’s trade association, business owners whose results have been demonstrated over time and whose opinions you trust. The well known power of group dynamics suggests that you limit the size of your strategic planning group to 6-8 people including yourself.

Each of you should also be located outside each other’s traditional marketing areas. If some of you are nearing retirement with vast experience, others in the midst of their careers growing their companies and some who are successors in successful businesses in your industry you will have an important range of diversity. Those who have been around a while can see things coming that are invisible to those just starting out and vice versa.

The Strategic Planning Process:
The strategic planning process should be simple, just three questions to focus on, so you will keep them at the top of your mind. Naturally there are multiple components of these three questions that will become second nature as the process of discussion moves along.

What are you going to sell in the future and how? Each member of your strategic planning team will offer different ideas based on what’s working for them now, what they have already considered for the future and their perspective (such as their Internet savvy or lack of same). ,p>

Who are your target customers and why? Every successful business owner focuses on their market share inside their traditional market. With different perspectives you will be able to expand that traditional marketing area AND focus on increasing your share of each customer. Members of your strategic planning team will open your mind to tactics they are using to sell more products of one kind or another to your existing core customers.

How can you differentiate your company vs your competitors? This often means discontinuing lines no longer profitable that you’re still carrying because you’ve always carried them. It may mean focusing on fewer products and services where your specific capabilities excel. And it most assuredly will mean introducing new products and services recommended by your strategic planning team based on their experiences and perspectives.

Once you and your team have these three questions at the forefront – the qualifiers become automatic. What’s important? What is it now? What exactly do you want it to be? And what’s possible to achieve at the intersection of your goals and your resources?

A Commitment To Action:
With the continual input from your strategic planning peer group you will be able to more easily target strategic opportunities all around you. Opportunities that would have continued to be invisible to you without their well considered input. These actions will, in and of themselves help you choose those capabilities important for your future growth and enhance your capacities for making the most of them.

As you and the other members of your strategic planning peer group put your plans on paper and keep them in front of each other you will develop an environment for continually review and modify your evolving mission statements.

Continually articulating your goals for the future as they are continually refined by your strategic planning peer group will keep the important next steps always in view. Taking action yourself or delegating it to the individuals or teams within your organization who have the power, authority, and accountability for their completion is all that now stands between where things are today and where you want them to be in the future.

If you are seriously interested in your organization’s future you’ll find that there’s really no better way to create and manage your strategic planning process.

Your next move should be to click below and take five minutes to review my recently published report that contains complete instructions for your Do-It-Yourself Strategic Planning process. Article by Wayne Messick, publisher of http://www.iBizResources.com

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