American Money

Maximizing cash flow is like telling a horse to gallop. You need some idea where you’re going, and make sure you stay on the horse in the process. Depending on your type of business, you will have a few “cash crop” products or services which are natural extensions of your core business. This is nothing like the “debt collection” approach to business operations, where you have to stretch your resources to cover everything at once. Quite the opposite, it creates resources.

Cash flow generation basics

Before we cover anything else: The classic mistake of businesses trying to generate cash is to get tangled up in areas where they lack expertise, or where the new operations don’t mix well with core business. Just don’t do those things. The risks include waste of time, staff and money which could be better used where you know how to make money, and that’s not including potential losses.

Every business has a few particular products on its inventory which carry the load of the business. These are the products which make the business pay its way. They’re good sellers, they’re popular, and they are definite winners in your market. Similarly there’s always a few services which are load-bearing business operations.

These are your trump cards. These areas can be developed effectively and simply. Instead of reinventing the wheel, you develop your existing markets more efficiently, and spread your net wider to catch more sales. You also don’t have to do things to your business plan which will make your bank have a fit, another advantage. As a matter of fact, the banks will look favorably on a logical extension and expansion of your business.

Cashflow mechanisms

Pretty simple so far, isn’t it? Now comes the devious, sneaky part. You can use your existing suppliers to help generate much better margins for yourself with this extended market reach. Like the bank, the suppliers will understand what you’re trying to do, and they don’t mind making more money either. Their margins are OK anyway. You won’t get a lot of resistance to your new approach.

So, without doing much more than basic evolution, you’ve increased your profit potential and created better margins for yourself.

Sales, sales and more sales- Targeting your products

This is the only area where you may need some external help. The trick now is to make sure you sell, and that means marketing. If you know your market, you’re probably in the ballpark for increased sales, but you must advertise and make sure your client base and your market segment know about your new offers. If you’re not sure how to do this, you’ll find freelance marketers are a gold mine of ideas on how to get basic sales going. Some of them can even find whole new areas of distribution, so you stand to gain more market share, too.

You don’t need PR, or any other expensive bells and whistles. Whatever you do in advertising or marketing, simply has to link directly to sales. Direct response marketing is a good option, if you find a good marketer. All people need is a phone number or a website, and you need good sales technique. The rest is easy.

Forget about waiting for the debt recovery guy to show up, and start making money!