Ian Dickson - Performance Coach » Money

Quick Cash Flow Tips

Ian Dickson — Sun, 13 Dec 2009 07:59:09 +0000

Quick Cash Flows

01. Test & Measuring System – for everything
02. Improve Conversion, Use Phone Scripts – Incoming and Sales
03. Put Prices Up
04. Add on Sale – Cross sell & Up sell
05. Public Relations Article
06. Direct Mail to existing Clients with telemarketing backup
07. Cold Phone Call – Use script
08. Extend Supplier Credit – or any other creditors
09. Pre paid sales
10. Use Debt Collection Agency
11. Closed Door Sales – bring a friend
12. Packaged offer – Quick moving line with slow moving line
13. Product Range add on sale – limited campaign (this week only)
14. Reverse Host Beneficiary (sell other peoples product for % )
15. Increase stock turns – stock rationalisation (slow stock out )
16. Events – novelty events to generate publicity
17. Sell excess assets
18. Small ads – classified – spot ads – for lead generation
19. Sales Team Incentives
20. Split level Pricing
21. Referrals – Have a referral or non referral price

Keeping Cash Flowing in a Down Economy

Ian Dickson — Fri, 04 Dec 2009 10:00:00 +0000

1. E+R=O – Event + Response = Outcome. Get your mind focused on what you can control and the opportunities that exist. Look for positive influences and people who take this climate as a welcome challenge.

2. Trim the fat. It’s easy for expenses to creep in over time; now is the time to examine each one. Re-negotiate payment terms if possible. Each employee must make a tangible contribution to profit, with numbers you can measure.

3. Stay liquid. If you know your business will cyclically have a negative cash flow, line up financing now – before you need it. The bank will look at you more favourably if you go and see them before you need help than they will when you need help.

4. Your current clients are worth pure gold. Go the extra mile to retain them. Regardless of the markets you should always always look after your existing customers. 80% of your current income will come from 20% of your existing customer base.

5. Go where the recession is not. Many industries do just fine in a recession, and the folks who are employed there make good target clients. There are many industries and professions that are not recession impacted. Form alliances with these busy people and work with them to ensure you can share in the opportunities they have.

Top 10 Tips for Maintaining Cash Flow in your Business

Ian Dickson — Tue, 03 Nov 2009 09:16:32 +0000

1. Triage payments — Make a list of all payments due for the next three months. Give payroll priority and see what else you can negotiate to pay later. You may be able to slide with utilities; subcontractors can often be persuaded to wait a bit.

2. Accelerate collections — Call customers to check on payments that are overdue, or due soon. If you have a good relationship, you may be able to ask for early payment as a favour. For older accounts receivable, offer to forgive 15% of their overdue balance if they pay within the week. This may encourage them to respond and it’s less costly than hiring a collection agency to go after receivables you may never see.

3. Invoice early — If you consistently send out invoices a week late, you are delaying receipts by a week. If you average £7,000 a week in receipts, the net effect is that you have £7,000 less to work with. If you take 10 days to send out the invoices, it’s the same as if you need another £10,000 in working capital to run your business.

4. Offer discounts — This invoicing carrot can speed collections, but make sure that you understand how much it is costing you. Some large companies have policies in place that require speeding payments to earn discounts, e.g., 2% for paying within 10 days. But beware: Suddenly offering a 5% discount for payment in 10 days could give out the wrong signal.

5. Invoice more frequently — If you are billing customers for time, consider billing twice a month instead of once. Billing promptly on the 1st and 15th of the month speeds up immediate cash flow.

6. Ask for some payment upfront — Instead of just billing for time as it is incurred, ask for a third upfront, a third while the job is in-progress, and a third upon completion.

7. Fine-tune the timing of your payables — Take advantage of the maximum allowable time (60 to 90 days) to pay suppliers. Picture it as an interest-free line of credit that gives you more time to collect accounts receivable without spending money on short-term credit lines. If your payroll withholding taxes total less than £50,000 per year, remit the withholding on the 15th of the following month, instead of three days after payday.

8. Ask the right people for a loan or investment — Remember what they say about banks: They will lend you money only if you can prove beyond a shadow of a doubt that you don’t need it. Outside investors will sense your plight and demand onerous terms. This is a time to turn to friends and family and/or to get creative. Key customers might be able to help you out by advancing money to undertake a new product or pre-paying for products in anticipation of future demand.

9. Manage your credit cards – Many credit cards offer a cash advance credit limit that is separate (and lower) than the overall credit limit. Take the time to track the balances and credit limits for cash advances vs. overall purchases separately. Create a simple spreadsheet, and update it as the bills come in. When things get tight, make sure you charge whatever expenses you can to those cards that still have available merchandise credit, but no available cash advance credit. During a cash flow crisis, you want to maximize your available cash advances as they are almost the same as cash.

10. Consider layoffs — While large companies can take advantage of “redundancies” and “synergies” in downsizing their staff, it’s more difficult for small business owners. Each employee has his/her own specialized revenue-generating abilities. Instead of letting go entirely, discuss rehiring them as freelancers.