“Keeping that cash flowing keeps the business going,” says entrepreneur and business owner James Sinclair who, in the final installment of our series of 12 Business Masterclass videos, reminds viewers how important it is to focus on income-generating tasks.
Of course, it’s all too easy to succumb to cash flow worries – like paying the bills, managing business rates, and taking care of all those other essential overheads that can stop entrepreneurs from investing in the success of their business.
The solution? James suggests adopting a business model that allows you to see what’s going to happen to your business and reliably predict next month’s cash flow.
This might mean tweaking your existing set-up to find new customers to buy from you each month, and establish multiple sources of revenue within your ecosystem. In other words, making changes that will ultimately create a regular and reliable cash flow.
Using the 'rule of four' to drive regular cash flow
However, there’s an approach that’s even better than making adjustments, says James, who introduces his 'rule of four'. What does this mean? Essentially, it’s a business model in which you give customers a reason to transact with you four times in quick succession.
This way, business owners can create customer loyalty and ensure regularity of cash flow by giving people more opportunities to purchase their products and services.
Keep watching as James shares top tips for building profitability into your business. For example, experimenting with offers as opposed to discounts, and introducing payment plans and guarantees to incentivise customers to feel comfortable parting with their money.
James also encourages business owners and entrepreneurs to explore ways to generate cash flow by standing out from the competition. This could be achieved through a product differentiation strategy or by sharing customer feedback, reviews, and testimonials.
In fact, James believes that peer-to-peer reviews are so powerful, you might want to allocate some of your business’s marketing budget to influencer collaborations to convert potential customers.
And speaking of converting, his final piece of advice is to put systems and processes in place that allow you to follow up on all the leads and enquiries that come into the business. That way, you can be sure of making the most of every opportunity to generate that all-important cash flow.
Find more of James Sinclair’s Business Class videos here.