Growing a business is a labor of love. Sometimes there’s plenty of cash on hand, and other times … well, there’s just not. And often as you’re growing, there’s trial and error involved as you figure out your cash rhythms. You can’t always control your circumstances, and planning ahead to have extra cash on hand is of course your best bet.
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So for those of us in the “real” world of running a small business with its ups, downs, and sleepless nights, here are five ideas to help increase your small business cash flow ASAP:
1. Have a Sale or Special Promotion
While you may think of sales as something only for big-box or retail stores, consider how you can feature a special promotion for your business. Offering a discount on significant purchases, or a special bonus to incentivize clients to hire you now, can drive more sales than sitting and waiting.
Of course you don’t want to have sales every week, and you have to be careful how you position your promotion, but when done occasionally and done right, running a special offer can be just the boost you need. Email or call your clients or customers to let them know about the special promotion. And remember to add a deadline to your offer, otherwise they have no reason to take action now.
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2. Raise Your Prices, but Do This First …
It’s probably time to increase your fees, if it’s not long overdue! But don’t do it quietly. Announce to your current and past clients and customers that prices are going up as of a certain date, and explain why. Then give them the chance now to renew their contracts or stock up and save, before they’ll have to pay more.
Example: A blow-dry bar I frequent here in Scottsdale recently announced their prices were going up by $5 per service. But they gave me the chance to prepay for as many future sessions as I wanted at the current price … if I did so now. While it wasn’t a huge price increase, I love their services, so I stocked up. (And I now have a year’s worth of blow-drys waiting for me!)
3. Borrow for Tomorrow, or Apply for a Grant Today
The biggest barrier to small business growth is funding. Some business owners are dead set on not taking on ANY debt in their business. Hey, if you can do that, good for you. But I advocate debt as a fantastic tool when used smartly. In my early days as a business owner, I built my little enterprise from my kitchen table using many a credit card. Today, even with a multimillion-dollar company, I still use debt as a tool when it makes sense. Whether it’s credit cards or a small business loan, consider if it’s the right time for you to take that on, to help you through a rough spot.
Also, be aware that small business grants are rare, but they do exist! And it’s not only the government that runs these programs. I’m working with Chase on Mission Main Street(SM) Grants, a program which is awarding grants of $250,000 each to 12 small businesses across the country. A small business owner could use the grant to grow the business including hiring new staff, purchasing larger orders of inventory, and more. While the deadline for small business applications was October 31, 2013, anyone can show their support by voting. Businesses must receive at least 250 votes by November 15 to be eligible for the grant. Visit www.missionmainstreetgrants.com to vote for your favorite small business.
4. Move from One-Shot Services to Packages
The owner of a personal training business came to me for coaching one fall season, wanting to increase revenue by end of year. But he insisted that the holidays were a terrible time for him to market. (“No one wants to get in shape when they could be eating pie at holiday parties,” he explained.) After further discussion, I learned he was doing a lot of single sessions with his clients. Together we put together a special package offer of 12 sessions which gave his clients a significant discount for booking multiple sessions in advance.
He promoted it during the holidays, with the spin “Commit to Your Weight Loss Success Now, but Don’t Work Out Until Later!” His clients were delighted to pre-pay now but still enjoy their pie, and know they were going to get back on track after the holidays. Best of all, this business owner got a huge cash windfall during his typical “dry season.”
5. Sell or Lease Unused Assets
Take a close look around your offices, home, and storage units for things you really don’t need access to regularly. Do you have excess materials, inventory or equipment? Don’t discount personal items as well. (Is it time to unload that boat you use just twice a year?) If you have extra office space, consider subletting it to someone who could use the workspace.
Example: Last year my team and I went through our company storage unit and found we had tons of video equipment that we just weren’t using. (We’d purchased it all two years ago when I was convinced we should do our own video shoots. Well, we were terrible at it! I swore from then on to hire pros instead. So now all this equipment was just sitting there.) I had my team sell the equipment online, and after that experience I looked at everything else we weren’t using regularly — trade show equipment, copiers and computers, etc. We were able to get rid of our expensive storage unit, while netting some cash too.
Lightening your financial load (and just clearing your clutter) can net you some cash to get you through a tough spell, and it feels great energetically too. When you sleep better at night, you’ll be able to focus more on growing your business..
Ali Brown is currently serving on the Mission Main Street(SM) Grants panel of experts, which will review this year’s applications and select the grant recipients. Brown is an award-winning entrepreneur, one of Forbes’ Women to Watch, a mentor to thousands of small business owners, and has been featured on ABC’s “Secret Millionaire.” Her most recent business has ranked on the Inc. 500 list.
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