Ben Kench - Focus On Creativity

Focus on Creativity

They say that ‘necessity is the mother of invention’ and when you think about it how

true that is. When the chips are down the mind can create all sorts of imaginative

escape routes. It follows therefore that when you challenge your mind to find another

way out of the cash flow challenge, there usually are ideas that can help.

For example the very structure of the sales process…do you ask for deposits? Do you

collect cash before delivery? Is there a system for bringing money in before you

spend out and thus prevent a cash deficit?

Deposits, as an example, are not common in the business to business world although

we all appreciate the need for them in any consumer lead sales environment. If we are

mentally attuned to paying a fair commitment up front for personal purchases then

why isn’t it a more common practice within the business to business market place?

I absolutely promise that if a business wants what you are selling then a reasonable

deposit is perfectly acceptable and doesn’t wobble the sale. I might also add…that if

you are thinking of the worst and believing that many of your clients would run away

when pushed gently for a little up front monies…why is that? If it is because they do

not have it then aren’t you running the much greater risk of the full debt being stacked

up to a client that maybe cannot pay at the end of the process either? Maybe this is

bad risk business and leaves you with an even bigger problem? Asking for money up

front isn’t rude and even gleans respect that you can be so strong with your terms of

sale. You have nothing to fear…the worst that anyone can say is ‘No’ and thus you

are in no worse a position. Just possibly many will see that it is a perfectly normal

request and you’ll have 20-40% of sales paying you some very needed and

appreciated cash flow. Please consider deposits more seriously.

What about cash on or before delivery? Well again it is common place in a consumer

sales environment – one wouldn’t expect to have anything without paying, so in

reality it isn’t that different in a business to business environment. The commonly

accepted thing though is 30 days credit – which as we all appreciate actually becomes

almost 90 days credit! Why don’t you take control of that and simply say that you

cannot continue to supply if their cash isn’t forthcoming within a more viable time

frame for you. If you are in a regular or repeat sales scenario than at least making sure

that clients keep paying you and don’t fall even further behind is critical or else once

again you might be in the risk of losing it all.

Just a thought on this issue…factoring or invoice discounting can be extremely useful

here. It will cost you and the commissions taken by banks and finance houses need to

be added to the sales costs, but in some instances it might be a very good shorter term

arrangement. Typically a finance house pays 85% or more up front…this is critical

when you are spending on a physical commodity as part of your service ( as opposed

to just a labour cost) as it at least allows you to pay your suppliers and staff at he end

of the month.

Explore the specifics for your business and ask several factoring houses - in today’s

competitive market they can be encouraged to be more competitive with their

offering. Check the amount they will allow you to extend credit to…make sure that it

is sufficient for 3 months trading…again I have seen clients caught out by factoring

providers that sound helpful but then limit the ‘debt’ to a set amount that is in fact

eaten up inside 4 to 6 weeks.

However the real thought with creativity is more along the lines of imaginative ways

to sell and package your product or service. Being creative with money management

is a good skill but creativity with selling is far more powerful.

Too often a business has a list of offerings and sees them merely as an available list

instead of being creative with packaged offers and encouraging either increase in

sales value or using the ‘offer’ to encourage other things such as speedier payment.

Lets face it, we’ve grown up since we were children with offers all around us

tempting us to purchase ahead of time…from cans of baked beans in packs of 24 to

larger tins of coffee or tea to 24 cans of lager just in case your quiet night in watching

the footie becomes a neighbourhood party! So why not create packaged offers with

our service or products? Use them to increase order values or even retain

clients…they aren’t going far from you if you have talked them into a future purchase

scenario…and this can be done with services too. What is to stop them agreeing to

your service for a year ahead if they sign a reduced deal rate? How about even

including extra months for the price and extra visits or bonus products? Creativity in

these areas – especially if you have a pretty rigid structure for pricing and delivery,

will help massively. Typically if you are much the same as your industry competitors

then these sorts of tweaks give you a valuable marketing edge.

If cash flow isn’t your concern because the margins on your products or services are

high, then going the other way and adding sales volumes by encouraging the delay of

payments or indeed re structuring the sale so that they aren’t in fact sold merely hired

can be beneficial. When you sit down with an open mind and think of the options

there are always several…the challenge is to open your mind to them as they aren’t

normally done and the first reactive brain impulse is to say it ‘can’t be done’. There is

no such word as can’t.

Creativity can also be shown in your marketing edge and stark images that have hard

hitting impact together with direct words when the target is more used to a veiled

subtle approach can make you stand out at just the right time. Creating a new

approach maybe that merely says a few home truths can have huge impact. If you’re

into dentistry or cosmetic enhancements try something like:

“Dirty Teeth Are Horrible!

People don’t like dirty and rotting teeth. They won’t say it to your face but they will

form an impression and walk away with their wallet. It doesn’t have to be that way.

You can have great looking teeth if you let Abc Dental Care help you.

Fact: better teeth equals better image equals opened wallets”

Simply show a rotten mouth next to a white smile. Let the pictures talk but let the

message be clear and to the point… this type of spending will show a tangible return,

do it today.

Take an hour today or tomorrow and think of a creative approach that ‘tells it like it

is’. I firmly believe that you can say something straight and to the point and be more

effective and that too often our thoughts on promotional materials are too gentle and

too vague. Hit me straight between the eyes…remember if I am not ever interested

because in that example I have great teeth already then it doesn’t matter because I am

not interested…and if I am vaguely interested you’ve just hit me harder and more

direct than all of the other gently cosmetically oriented ‘have a nice smile’

approaches ever have and you are the one that stands out and gives me a reason to act.

Get creative too with reasons why I should buy from you other than price. Give me

something unique – you! Make it personal! Let me know that it is you I get when I

invest…and that you can take me personally to where I want to go. Put more of you

in to the sales process and promise more of you

Ben Kench - control spening

3. Control Spending

Interestingly many people place spending restrictions at the top of their list.

Personally I do not believe that many of us are frivolous with our spending anyway

and thus I firmly believe that spending restrictions have a minimal impact and

effectiveness when dealing with quieter times. My thoughts here are about ‘control’

more than spending. I do not say stop spending…and I do not say stop spending on

marketing activity. Controlling spending in my book is to think before you go dashing

out for a meal with already friendly clients. Think a little before agreeing to spend on

the away-day with known associates and think before spending on another new

computer or electronic gadget that would be nice but actually is far from necessary ie

one that you have managed without for so long that another 3 months will not make

any real difference.

No, surviving a slowdown is not about stopping spending, and definitely not about

stopping proactive spending or marketing activity, it is merely a time not to be

careless. When cash is flowing freely take all of your friends out for meals but when

it might just dry up slightly ring them and wish them the very best. Control spending

when you have choice – because there will no doubt be occasions when you get

caught by a requirement to spend that must be dealt with. You might have a technical

issue that demands you fix it. You might have a vehicle issue that demands you fix it.

Spending then on that web enhancement or image makeover or brochure or desk or

telephone or similar could jeopardise the fixing a more vital piece of equipment that

went wrong without warning and this cannot be allowed to happen. Commit to

earning not spending.

It’s not just about controlling money, it’s more abut managing money. Think about

your business and money in all areas…holistically view all aspects of business cash

transactions. Think about stock levels. Manage money closely and make more effort

with drop shipping or promise delivery in 48hrs not ex stock so that your cash isn’t

tied up. Don’t immediately commit to paying the old terms or buying the usual

amount. Make a more informed decision and make your money work for you.

Don’t commit to larger orders when tempted with another level of discounting, buy

what you need and keep your cash free.

Think about sourcing new suppliers possibly from a foreign supply such as Asia or

Eastern Europe. Whilst it may not be your first choice maybe upon close inspection

items can be purchased that are as good when you really look around.

Think about buying slightly narrower range of product, only stock those that sell

quickly not all of those that might be called ‘popular’. Don’t splash out on staff

incentives instead spend time with them educating them as to some of the more

private side of running a business so that they don’t think you are just being mean.

So, as an exercise, have a quick look at all of the items on your ‘wish list’ eg new

software for artwork creation or a new photocopier or similar and then honestly ask

“If I had to manage without this for another 3 months what exactly would be the

impact? What might be the consequences? What else might have to be sacrificed if I

didn’t buy it? Or, if I did buy it anyway, what might be the knock on effect if then

something else broke down? (time to learn, other items that cannot be bought ). Very

often we work ourselves into a state where we imagine the worst and push ourselves

to spend when reality is it isn’t that urgent. Controlling spending when the cash flow

is tighter coming in needs a little more discipline but rarely means suffering.

Then as an exercise add another level…

Try calculating the absolute total amount that you could spend or would normally

spend if there were absolutely no restrictions whatsoever. Imagine that you were able

to buy what you wanted and it wasn’t cash that stopped you this month…(in a normal

working environment it is quite possible that you couldn’t find enough time to go out

shopping for all that you want anyway so actually time restrictions because of work

load are more of a factor than cash to spend)…but just try calculating what you might

spend if you could just go out spending.

Ok, now you have that figure…

What is the average sale worth to you? What is the average deal value?

Ok, so now, how many average deals do you need to cover all of that total spending

wish?

My guess is that actually your whole wish list is possible to be bought for only a few

thousand pounds and your average sale value is almost enough with just a couple of

sales!! Probably only 2 or 3 at a maximum are needed to furnish all of that wish list!!

And so controlling spending fades into significance when you compare with the

magic of focussing on a few extra sales. Push for 3 more and spend all that you like!!