Cash Flow(er) Part One

For startups, building positive cash flow can be a hefty challenge. Businesses are notorious for over-projecting sales and under-projecting expenses. Hidden costs are a given, and even a great idea may take its time to blossom. What to do?

1) Start with a plan and a budget. Fancy or no, planning can be a huge factor in how long it takes you to go from ramen to the Ritz Carlton. Having at least a basic business plan and budget may shave 6 months to a year off the time it takes to get your business from the red into the black.

2 ) Spend your money like it’s 1999. Learn to be frugal in both your personal and business spending. If there is cash in hand, whether yours or borrowed money, for some it can feel like a weekend in Paris.

Wouldn’t that big, shiny new planner make your business great? Time to swap the still-functional inkjet for a $500 color laser printer?

Okay…these things may be necessities for your business (or mine), but the main point is: Don’t make a purchase to make a purchase.

Sure…shopping can be fun, but if it made the difference between cutting loose from your day job in a shorter time frame or sooner finding the break even point for your business, you might reconsider how badly you need something.

3) Come and Get It vs. Go out and Get It. For many businesses, it can be so exciting to open the doors of a new venture that it might be hard to imagine the business not swamped with customers. New business owners often sit, wait and become anxious when their bank account is slowly or quickly dwindling, for customers to rush in and buy out their stock or enlist their services. If your business isn’t getting off on the right foot, there may be a number of easy to implement ideas that can things rolling.

Are there low-cost trade shows you can attend to get some pointers or inspiration?

Exhibiting at a local event, fair or festival (make sure the event is the right fit for your business) can be a great way to get exposure. Events can have a very wide range in cost. You want to test the waters, so try an inexpensive event that comes recommended by someone you respect.

Firstly, you may be able to sell your product or service at the event. Secondly, showing at a public event helps you to polish your act, get your lines down. Hint. The people that sit down, nod and smile don’t usually get much business and sometimes lose money at such events. If you wanna get out of that office chair and into the lush life, look people in the eye, say hello and make an honest attempt to connect with them. Sure, many will not care about you or your product whatsoever, but it is better to get accustomed to that up front, so that you develop the patience to find your true customer.

4) Marketing hero Seth Godin mentions worldview as being an extremely important factor in marketing and business success. A worldview is the perspective of an individual or group of people. Seth refers to worldview in regards to the marketplace, and how it is so important to find a good match between your product/service and your target market.

Case in point. Recently I was in a nearby town and stopped into a new restaurant that specialized in waffles. I talked with the owners for a while about their concept and found it interesting that they wanted to target the college crowd. Their town had some college students, but not in the numbers they imagined. The decor of the place looked more like a brightly lit ice-cream parlor than a joint that might pull in young hipsters. Clearly their business image did not match the worldview of their target clientele.

Seth makes a simple and powerful point. It is far better to market to people that already have an appreciation for your offering or to change your business to meet the worldview of the available customer pool. Many businesses lose the ranch by trying to change people’s worldview instead of meeting people where they are at.

Stay tuned………..

JB