How come some of the biggest businesses empires like Enron, Lehman Brothers, and many more have collapsed suddenly? Were they not being managed by professionals? Were they not able to hire all those success teaching mentors who have been minting money selling their lectures and books on tips to manage businesses successfully? These questions raise the doubt that there might be a very same rat creeping down your establishments, too. Similarly, this also supports the truth that you always need to learn new things to keep your business going and growing, too.
For example, what do you now about cash flow in your business? Is it negative or positive? This is something you would not have considered so far because even a negative cash flow doesn’t show an immediate sign of loss in a big business, but it does nibbles at net worth. A business, with a negative cash flow has to fund each of its sales to some extent. For example if its negative cash flow is 10% of its gross revenue, it has to fund $0.10 on every sell of $1.00. Initially, in flow of business, one may keep it paying and not realize the impact by delaying creditors’ payment, increasing credit limits by bank, or some other means but eventually business runs out of cash and bursts like a bomb.
Here are some tips to improve your business:
1. Cross-sell to increase your prices – cross selling is a powerful way of increasing your overall transaction value and thereby increase profit. McDonalds has nourished it in its blood.
2. Increase Your Prices – A good way to increase your sell is to increase prices. Businesses often fear that they would loose customers if they increase prices. But the fact is only a few of them leave that product and a new class of customers joins in exchange.
3. Improve Your Yellow Page Ad – People in business often take this great instrument of success as trifle. They do not put as much efforts in their yellow ads as they should have. It does make a tremendous difference to your sales.
4. Improve Marketing – ‘words-of-mouth’ has always been the most effective marketing tools. ‘Viral marketing’ is its new avatar. Exhaust it.
5. Monitor Cash Flow – A negative cash flow might prove lethal to your business. Keep watch on it. Get your cash flow calculated by experts periodically. Even when you are making profits.
6. Increase Profits Pay Taxes – A lot of the businesses keep from making profits to avoid paying more taxes, which is not right. Increase profit, pay taxes.
7. Stay Open for New Ideas – People often are found to be happy revolving in a rut. Once they have set a successful business they keep it going that way. Stay open for new ideas from employees, customers and from anywhere.
8. Count Customers – People often end up counting profits while they should concentrate on counting customers and keeping them. Your profit will naturally increase if your customers do.
9. Hire Professionals – It is often a case with most of the business that they, in attempts to cut cost, compromise with the quality of some important investments, too. Save where you can but pay where you should.
10. Rely on Workers’ Capacity – Small businesses take time to grow because their masters are afraid of accepting more load than their personal capacity to bear it. The truth is they should rely on their workers capacity which they can always increase to any extent.