×

Posted on

6 Tips to Improve Your Business’ Cash Flow

Tag: grow profit

PayTabs
Mohab Growth Hacks 0

6 Tips to Improve Your Business’ Cash Flow

Effective management of cash flow is crucial for any business. While you may have good turnover and profit, but you may lack liquidity if you do not manage your cash flow in an efficient manner. Cash flow management essentially entails keeping proper record of money coming in and going out. The analysis of this record may let you see the gaps and fill them accordingly. Here are some tips which will let you manage your cash flow easily.

Develop a Plan and Forecast: planning and forecasting involves you looking at your finances and then draw inferences for your future. While the task may seem daunting at first but with the availability of a number of software for cash management, your task may be eased to a certain extent. You can choose to use simple spreadsheet or some sophisticated software specially designed for this purpose, the choice is yours. You will be required to record your opening cash and bank balance and all the inflows and outflows there from. When you start seeing a pattern, you will be able to forecast your future transactions. This exercise will allow you to plan your spending accordingly.

Speed up Your Inflows: businesses need to provide credit line to their customers, which may lead to delay in cash inflow. However, curtailing such terms and conditions may lead to loss of revenue as your customers may shift to another vendor with liberal credit terms. In such cases, it is essential that you reconcile your objectives of achieving higher revenue and improving cash inflow. You may offer incentives for faster payments. Such incentives may or may not be financial in nature. For example, top fast payers may receive advance information about new product arrival. You may also institute late payment fees to discourage lax customers.

Control your Outflows: managing cash inflows is one facet of cash management system. The other side is to manage your cash outflows. The best policy is to talk with your vendors and seek more relaxed terms. You may also use your impeccable payment history to make your case. If you are able to extract a few more days for payment from your vendors, then it may work wonders for your cash flows.  However, never try to take a shortcut or default on any of your payments as it may impair your relationship with your vendors on permanent basis.

Finance your Inventory: liquidity is related to cash which is often tied up in acquiring other assets such as inventory.  Take proper record of your inventory and analyze it. You may find that your funds are unnecessarily tied up in old inventory which is not moving. In such a case, you may want to liquidate the inventory and free up your cash. Further, if you have excess of any asset including tools and raw material then re-sell them to obtain cash. You may have to sell them at deep discount but some money is better than the money tied up.

Use Professional Services: for better management of your cash flow, you may want to engage the services of professionals. This is especially important if your business is growing at a fast pace and the requirement for liquidity is high. You may engage factors for the timely collection of your invoices. Factoring works by providing you cash on the basis of invoices generated by you. It can be excellent way of availing short term finance. You are also not required to take any drastic step with regard to the collection of bills. However, factors charge fee or commission, which may not be affordable to many businesses.

Take Advance Payments: you may introduce new terms to your sales whereby you require the deposit of payment before the delivery is undertaken. This arrangement is especially helpful if you are engaging in a large order. Taking advance will lower your risk of default and will also improve your liquidity. Such advance payment may also be used for funding the transaction so that you do not have to look for alternative financing arrangements.

Cash flow management does not have to be an odious task. With these pointers you may manage your cash flows in an easy manner.

4 years ago
Top Tips to Increase your Online Sales
Mohab Growth Hacks 0

Top Tips to Increase your Online Sales

Achieving strong top line by growing online sales is one of the biggest targets for any business. Whether you are running a small shop or a complex high profile enterprise, the optimal utilization of online channels may help you immensely in achieving this target. Here are some of the pointers which you need to pay attention to for ensuring that your revenue sees substantial upside.

  1. Boost Your Leads: Leads are simply the visitors to your website who have shown their interest in your offerings. The main characteristic of a lead is that they provide you with personal data, their contact details and their consent to send them more information. If you are looking to boost your online sales, then it is important that you fully utilize the leads available to you. Some of the most important methods for accumulating such leads are through email subscriptions, online contact forms or website registration. Whatever is the source of these leads, you can use these to achieve your target of higher sales. Further, the information collected through this route may also help you in your analytics program and aid the process of making more informed marketing strategies.

 

  1. Focus on Conversion Rate: While the exact definition of conversion rate would depend on the outcome you expect, but in this case it may be described as the number of visitors to your website who actually end up purchasing the product or the service. So, while you should aim to increase the number of leads or visits to your page, you should also endeavor to convert such leads into actual revenue. This ratio will also help you determine the quality of website traffic generated by your marketing efforts. There are a number of actions you may take to improve the conversion rate. These actions include changing the layout of your website among other things.

 

  1. Control Your Bounce and Exit Rate: Analytics may help you in determining bounce and exit rate for your websites. Both these metrics point towards the existence of different issues with the shopping experience at your website. Bounce rate is the percentage of people who leave your site after visiting just one page while exit rate refers to the percentage of visitors leaving your website from a specific page, irrespective of the number of pages visited by them. Such bounce and exits are wasted opportunities which could have been converted into revenue with appropriate actions. It may be useful to undertake detailed analysis approach to unearth the reasons behind high bounce and exit rates.

 

  1. Simplify your Website: The design and layout of your website is an important factor which can have heavy impact on different metrics such as conversion rate and bounce rate. A large portion of such exits and bounces are due to confusing website layout and complicated processes. While it may seem counterintuitive, but providing relatively lesser options may help in keeping things simple for the visitors. It should also be ensured that the visitors are not required to follow complicated procedures for checking out and making payments. Simple website and checkout processes are vital for achieving high conversion rate as these are easier to navigate.

 

  1. Provide Call to Action: A Call to Action (CTA) is the element which urges the visitor to undertake a specific act or step. It may range from ‘Subscribe Now’ to ‘Buy Now’ appeal, depending upon the main aim of the business. However, in all such cases, the personalized Call to Action tends to bring about the best results. A customized CTA highlights the relevance of the product or service to the customers’ needs and therefore is more likely to be successful in achieving its target. It is important to avoid using jargons or generic CTA buttons. Such personalization may be done by changing the language or by modifying the content of the page.

 

These pointers are some of the most important steps you can take to enhance your online traffic and revenue. However, depending upon your business objectives, several other courses of actions may also be useful for you. The key is to identify and analyze the unique features relevant to your business and then work on them to hit higher targets.

5 years ago
How Cross-selling Can Help Maximize E-commerce Profits
Mohab Super Merchants 0

How Cross-selling Can Help Maximize E-commerce Profits

Are you using the cross-selling strategy to increase your sales in your online shop? You are losing a lot of money if you haven’t considered cross-selling. Both cross-selling and up-selling tactics are effective ways of increasing the order value, including one of the most critical business metrics. Are you wondering what this is? Well, this post will outline what cross-selling is, how it works, and why your online store needs it.

What’s cross-selling?

This is a sales approach designed to generate more sales by recommending related, complementary or additional items to a consumer who has shown commitment to buying a product. These are products that improve or optimize the original item by providing new functionalities. For instance, think about the insurance or casing sold to you whenever you purchase an electronic device.

However, this isn’t merely about providing anything you can think of. The key here is to offer the customer additional value by showing them how you understand their needs. Just like any other sales and marketing activities, cross-selling must be planned and executed strategically.

Differentiating cross-selling and up-selling

Both cross-selling and up-selling help maximize the purchase value and enhance the buying experience of a consumer by adding value to a product. Cross-selling only focuses on the promotion of additional products from related categories while up-selling encourages a consumer to buy a higher-end version of the same item or pay more for extra features and upgrades.

Cross-selling in e-commerce

When you choose to incorporate cross-selling as a sales strategy, you will focus on introducing related products to consumers who view products on your website or have added an item to their shopping cart. If executed correctly, the cross-selling technique will feel natural and boost your client’s purchasing experience by offering them matching products that will increase the value of the product they have bought.

How cross-selling is done

The initial and most vital step to succeeding in cross-selling is finding matching products, and creating offers. Like other e-commerce aspects, the positioning and timing of these offers must be tested. But, a prevalent practice is to provide the right options on the pages of your product especially during follow-up email campaigns and checkout.

Common cross-selling strategies include:

  • Visual aids – This strategy is ideal for lifestyle and fashion products, where clients are mainly driven by visual cues. Use high-quality product videos and images to show the functions of the items in real life and prompt the consumer to purchase the entire package rather than getting one item.
  • Bundling – This involves packing items that go together naturally like a digital camera, camera case and memory card. This will maximize your profits and you should make sure that the client knows that they require these items to use the product they bought initially. Consider providing outstanding discounts to appeal to the buyer.

Reasons for cross-selling in your online store

You must be wondering if cross-selling is worth the effort. Of course, it is! Most retailers have relied on cross-selling for many years for a reason; it works. If you haven’t thought of incorporating it in your store, you are leaving cash on the table. Advantages of cross-selling include:

  • Boosts profits: Many large chain stores usually have high margins on accessories than on main products. Consider using this strategy in your store. If you choose to offer flat-rate or free shipping, you will save money on the small accessories that do not cost extra to ship but still offer more revenue.
  • Increasing the average order size: A consumer who is ready to but a product is likely to get another item if the second item adds productivity to the first item. So, if you spend some funds to market such products to your new clients, most of them will buy more from you.
  • Increased customer lifetime value: Each time a consumer buys your products, they will spend more. This means you will be earning more whenever the customer opts to buy from you.

Cross-selling can help grow profits. If you haven’t yet used cross-selling, consider giving it a try. Once you find the best selling items, get related products that will interest your customers. Present all the products to interested customers during the checkout process or on the product’s page. Do not forget to build trust with clients and avoid pitching too hard.

5 years ago