Cashflow in the Small Business – Ignore This at Your Peril

Starting a small business can be a daunting task, particularly if it’s the first time you’ve made the leap from employee to independent business person. Underneath the excitement of going it alone and contemplating the risks and potential rewards lies the anxiety of making sure you get everything right and don’t land yourself in a difficult situation, particularly if you are heavily committed financially.

The key thing is to understand what a business is actually all about. If you have just started a plumbing firm, or opened a flower shop you may be totally focused on getting out to customers and selling your wares and products, and this is great, but if your prices are too low you can have dozens of happy customers and still fail. That’s because the prime purpose of a business, and it is surprising how easily this can be forgotten in the flurry of activity of starting up, is to make a profit. Everything else you do is simply a way to make that happen, and if you are spending more than you are earning on an on-going basis, you will go bust.

So, a fundamental aspect of the business that you should take account of is the finances, and in particular cashflow.

Cashflow is all about what you actually have available to spend and what you need to spend it on. It’s all well and good to have orders lined up for the next six months, but if you can’t meet the payroll and VAT bill at the end of this month, you could still go bust. You must account for the cash you have available in the bank account at any one time, and plan ahead. If you’re not confident of doing this yourself, then employ a bookkeeper or accountant to help you out. It’s another drain on your finances, but the guidance they give you could be the difference between staying afloat in the long run and sinking quickly. If you are happy to account for the money yourself, however, it keeps you in control of the business and lets you decide the right priorities on a day to day basis. It need only take a couple of hours each week, but that investment in time will let you properly decide what you need to do before events overtake you.

The principle is fairly simple. You look at your bank balance, what your income is going to be, and what bills and outgoings you have coming up. Add them up and subtract them accordingly and you can see how much money you will have left. If things are going well, and you have enough money, then you can decide how much to put aside for the future, to pay phone bills, rent, rates, VAT and tax and any other bills you can think of that are coming up. If things are not going well then you have time to think about how to deal with shortages. Can you negotiate with your suppliers? Do you need to raise some short term finance to get you through a lean period, and if you do borrow, will you be able to cope with the repayments on top of all the other bills? Do you need to delay drawing your own income to free up some money, and make up for it in future when the situation improves? All tough decisions, but by watching your cashflow you give yourself a chance to deal with the issues before you have a pile of final demands on your desk.

The main mistake that small business owners make when they don’t watch the cashflow properly is not building up a reserve for the future. When everything’s going well it’s all too easy to assume it’s going to be like this forever. The company car is bought or upgraded, the salary drawn is increased, two holidays are taken and all the perks of being the boss are exploited to the full. But if this is done and every penny is spent every month, then there is nothing left to cope when business is not so good. Enjoying the fruits of your hard earned success is absolutely the right thing to do, but it must only be done once a reserve of cash is saved up and put aside. For every pound earned, a certain amount must be saved for tax and overheads. A further percentage should then also be saved. How much that reserve should be will vary for each business, but it should account for at least 3 months of running the business with no orders or sales coming in. While this is building up, the owner should also keep their own income at a modest level. Once the reserve is in place, then the high salary and perks can be taken, safe in the knowledge the business can stand on its own through the bad times as well as good.

In business cash is king, make sure that every day your business has enough to keep afloat and it will return the favour for a long time to come.

Dread Marketing Your Business? 5 Ingenious Strategies To Make Marketing Painless (and Profitable)

Are you a reluctant rainmaker? You’re great at what you do and would rather much spend your days doing that… than having to beat your own drum, and rattle neighboring trees to make new business fall into your lap.

If you view marketing as a pesky, annoying activity you have to get done rather than something that makes you leap out of bed every morning as you live and breathe (like me), then my friend, this article is for you.

Chances are if you groan when you think about marketing, it might be because at some level you think sales and marketing is about pushing, coercing or manipulating people into buying your services.

Ugh.

I don’t blame you if you feel less than thrilled if that’s what you think. Fact is that’s still the way most people teach marketing but to me that’s annoying, sneaky, and very outdated.

And, in case you needed any more reason to abandon that train of thought, in this new economy, that kind of approach just doesn’t fly.

Our clients are savvier than they’ve ever been in the history of marketing. They’re far more demanding, And they’re far more skeptical. Real marketing is about building relationship and establishing value first. If you’ve done a great job doing that – they’ll be the ones coming to you asking “how do I get more?” No magic tricks, hypnosis or voodoo involved. Just plain old-fashioned value combined with a dash of integrity and a good dose of creativity.

Here are 5 easy strategies to climb back in the saddle and make promoting your business a breeze:

  1. Give up chasing the sale (that’s the old school, old economy method). Most companies are so busy focusing on lead generation and finding new customers, they completely ignore the ones they have, and those customers wind up never buying from them again. That’s backwards, especially when you remember it costs five times as much money to sell to a new customer than it does to get an existing customer to buy again. Invest at least as much time and money into developing relationships with your existing customers as you do trying to find new ones.
  2. Get very clear about who you’re selling to. Don’t think of your target market as a target market. Think about them as a single individual – your ideal client. Give them a name, create a profile for them so that they’re a living breathing person. Now write all your marketing as if you’re writing just to that person. This will prevent your marketing from sounding like a boring mass marketing.
  3. No more marketing one night stands! Forget firing off just one marketing piece and expecting the poor little guy to do all the heavy lifting for you. At the bare minimum your marketing should be a 3-step campaign. Some of the most biggest (and most successful) campaigns I’ve ever done have involved as many as 49 different steps – in a range of different media. Repetition is key. You have to be like Waldo in your target market – popping up everywhere your prospects are looking.
  4. Create a marketing calendar for your business. This is a monthly and then weekly breakdown of all your marketing activities that you need to be doing in order to be filling your marketing funnel with qualified leads. Marketing is a process, not an event. It’s highly likely that if your marketing isn’t scheduled to happen in advance, then it doesn’t happen (unless you’ve got a cash flow crisis).
  5. Learn how to market your business but if it’s not your true love, then, outsource it fast and get out of your own way. Some of my best private clients are themselves very good marketers, so why do they hire me to help them? Because while they might be good at marketing, they’re not great at it – and it’s not their one supreme skill. Their time is far better spent doing what their supreme talent is – that might be face-to-face relationship building with giant accounts, beavering away in the back room creating new products, or implementing processes and systems to make their businesses run like a well oiled machine. Whatever your supreme talent is, that’s where you add the most value to your clients, and to your business. If marketing isn’t what you live and breathe – that’s ok. You don’t have to. There are plenty of great copywriters you can outsource it to (ahem!).

But what you do need to know is what great marketing looks like, and how to tell a great marketer from just a good one.

And one final word of advice, no matter who you use to help you with your marketing, never, ever hand over the reins to them entirely. This is YOUR business and as business owner you always need to keep a watchful eye on your marketing. It’s the lifeblood of your business.

The Real Ways To Advertise Your Business Online

eBay – It generates massive traffic.

You may think that this is a mistake and that eBay is only any good for selling off your old set of golf clubs. However tens of thousands of people register with eBay daily and over a billion page views were registered in 2007 alone! eBay is one of the most visited sites on the internet.

There are several ways you can advertise on eBay:

Online Auctions: Sell your products on eBay and drive customers to your personal website by including links to your About ME page. The About ME page is the one place on eBay that you are allowed to place external links, provided the site is the seller’s own personal site, not part of a larger site.

About ME: This page is the ticket to driving traffic from eBay to your own site. Place a well-placed link on your About ME page, and tell your visitors why they should visit. Please, make sure it complies with all eBay policies! Your account can be suspended for not abiding by eBay’s rules. Use your best copy-writing skills to draw in traffic to your About ME page, then to your site. Also, be sure to have a link on your personal site that allows users to sign up for a newsletter. This way, if they aren’t going to purchase, you can keep in touch. Learn more about creating an about us page for your eBay store, website or blog here.

My World Page: This page is also highly indexed by Google and the rest of the search engines. A quick example: Google your own eBay user ID. The My World page often is listed first! Use this page to advertise your items, talk about your business, and customize the best way to persuade viewers to visit your About ME page.

Social Bookmarking: There are many social websites that let you join a community and gain a following and the number is increasing every day. Two of the largest are Facebook and Twitter. Facebook allow you to advertise and have an advertising account. The potential is great for getting targeted traffic to your website. StumblUpon is a link sharing website that brings your favourite websites to you based on your interests. It has the potential to bring hundreds of thousands of visitors, but your content needs to be exceptional.

The thing about social bookmarking is that you can’t just drop your links into a social networking website and expect to generate traffic and you may be better off investing your time in writing articles. However, these websites can provide a useful back-link to your website and the opportunity should not be overlooked to use them.