Cashflow Challenge

So, running a business in 2008..is it a bit tough at times? Does it challenge the grey cells and stretch your pressure valves?

Constantly I hear business owners grumble about similar things…not enough time, staffing issues, legislation and red tape issues, cash flow issues and lead generation marketing issues to name but a few. It is a tough old world out there but is there anything we can do to make it better?

I’d like to touch on one of these struggle points very briefly …lets look at the cash flow issue for a moment.

Cash Flow isn’t a magic black art. It isn’t the realm of the rich and fortunate - even they sometimes have similar challenges, it’s more the way the challenges are perceived and dealt with. Essentially mastering cash flow is a personal challenge in much the same way as time management is. Indeed my approach to adding business improvements is to re-engineer the thinking and help the business owner or manager with the way they think and act. You see, cash flow challenges come about as a result of two main actions: firstly spending money that you haven’t yet got and secondly losing sight of the prioritisation of the sales process to generate the cash in the first place.

Now, I can hear you arguing that some times there is a need to spend that is forced upon you such as an IT meltdown that cannot wait because you need IT to function – this I appreciate, however by and large the majority of businesses struggle with cash flow almost all of the time and when this is the case it is always because of a lack of one or both of the two reasons I cited.

We live in a world where there are always new services, new gadgets and new demands that pressure us into the spending of money. We’ll meet with a branded goods supplier and they will convince us and show us that spending on mugs and pens and the like will transform our business. Then we’ll speak with a service provider who tries to sell us PR services or advertising that they say will solve al of our lead flow problems. Later still we’ll meet a provider of print who will convince us that a new brochure shores up our image and then we speak to a web site builder who convinces us that the Internet can become our be all and end all if only we invested another chunk of cash with them….and so it goes on. We are never short of reasons and the providers are never short of justifications…but bluntly the old adage of “if you haven’t got the money you cannot have it” needs listening to. STOP spending!! It doesn’t really hurt! It wont kill you! The world wont stop spinning!
I fully empathise with you that it isn’t ideal and Yes there are reasons that justify often the spending in advance but very, very often we get carried away on a rosy glow that leads us to buy when it isn’t yet necessarily urgent.

Coupled with this though is a very, very real need to place a lot more emphasis on selling. Time and time again I examine businesses and when pulled apart they devote very little time to actually selling and very little devoted resource. Be honest, how much of your time is devoted to actual live selling and the generation of sales results? If its not down to you because you have a team hired than ask how much of a priority that department is given? Does the sales team lead all other activity? Or is it a poor relative to your admin process? Usually cash flow is better helped by improving monies in…far better in my opinion to raise revenue by 50% than cut costs by 10%. Obviously cutting costs where possible is always a good idea but what I ask you is “what is better to focus attention and time upon, raising results by upwards of 50% or even more or possibly cutting costs by max 15%? Are you focussing attention on minor changes or major possibilities?

So my suggestion to improve cash flow is to adjust priorities and focus. Really examine how much preference in time, money and peoples attention you give towards selling. Look for ways to add, improve and refine. Study it! Learn ways of enhancement instead of simply believing you do it the best way it can be done…there’s always a better way. Invest possibly I some critical tools such as CRM software and that really is an investment that when used properly gives a huge investment return.

Cash flow challenge is not a given. You do not have to suffer and you can do something about it to improve. Ask always How Can I Do it Better? And together we’ll have the year we want!!