Veteran entrepreneurs know that business naturally ebbs and flows. If you track your business financials (which I certainly hope you do!) you will be able to see these peaks and valleys coming from a mile away.
Unfortunately, all too often I see a combination of poor planning and inconsistent marketing create a crisis cash situation that has small business owners in a panic. I call this effect the roller coaster income syndrome™ and it is anything but a pleasant ride.
But put down that brown paper bag you have resorted to breathing in: I have 5 easy steps that can help you pull out of a cash flow crunch and even set the foundation for future growth.
5 Simple Steps from Cash Flow Crunch to Profit Expansion
- Do NOT panic! And, by all means, do NOT do anything knee-jerk like stopping all proactive marketing activities. Often an entrepreneur will say things like, “I can’t afford to spend money on that email campaign right now.” During a cash flow crunch, you can’t afford not to! Stopping your efforts is the WORST thing to do and could have dire consequences when the lack of client acquisition and retention end up meaning long-term turmoil. If you need to cut expenses, resist the new line of Manolo’s or daily Starbucks purchase. Or if it is really dire, cut the cable TV – you need to spend your time marketing anyway.
- Shift your attention QUICK to what you want to create. My clients will tell you I am like a broken record – “What you focus on is what you create.” When you focus on your lack of cash, the lack of cash will continue. Define the results you want to create and be specific. Rather than “I need to make more money”, consider “I want to land 5 new clients who will invest a minimum of $2,000 by December”. Once your result is defined, focus all your attention on that result and build your action plan accordingly. For example, “For each new client, I must make at least 5 sales calls to existing leads in my database”.
- Yes, expand. The natural inclination in a cash flow crunch is to constrict emotionally and financially. Now is the perfect time to add a new service offering or launch a timely campaign. Make sure that your promotions have a specific call to action and expiration date. The famous marketer Dan Kennedy says ‘If your offer doesn’t have an expiration date, it isn’t an offer.’ Here are a few ideas:
- Create a new service offering or bundle 2 or more existing products to create a new one
- Launch a promotion (i.e. – holiday, customer loyalty or back to school)
- Pick up the phone. This isn’t the time for passive efforts like a new PR campaign. Call that hot contact; set-up lunch meetings; call client referrals; call Power Partners. Go through the mounds of business cards on your desk and start setting appointments. Now is the time for direct sales, not long term brand building marketing efforts.
- Get out there. Rather than shirking away from locations where colleagues (and competitors) might be gathered and ready to ask you “How’s business?”, be seen on the scene: Attend networking events, offer free consultation meetings, and conduct webinars or teleseminars. Putting your name and face in front of potential clients is the ideal sales opportunity.
The most important thing when you are in the middle of a cash flow crunch is to remember – this too shall pass. When cash flow crunches occur, kick-up your marketing and sales programs. Moving forward, set aside time each day to ensure a consistent effort and you will be sure to achieve a greater level of success. Rather than wanting to jump off the roller coaster you will be ready to embrace the ride!
© 2018 Kelly O’Neil, CEO, Innovate Media Services LLC.
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