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Cash Flow

Turn Your Company into a Money Machine

How to access instant cash flow.

Harry Welby-Cooke

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Novice entrepreneurs quickly learn the depth of truth behind the old saying: “It takes money to make money.”

Beyond profit, cash flow is king in business. It’s therefore vital for businesses to establish cash flow as quickly as possible during their first year of operation.

These practical tips will help you to generate cash flow and a customer list that will serve as a foundation for repeat business.

1. Primary service or product:

One of the easiest ways to boost cash flow and profit is to drive your customers to your bestselling (or primary) product that has the highest profit margin.

2. Deposits or pre-paid contracts:

If you are in a service business, deposits are a great way to generate cash flow upfront. But you need to deliver on the back end, or you won’t be in business for long.

If you have a product-based business, you could also do the same with pre-orders, with a percentage of the final sales price going to secure the order or a certain delivered-by date. Get creative. There are endless possibilities in making this model work for you.

3. Periodic ‘closed-door sales’ for new customers or loyal customers:

Literally create a captive audience for your product or service. Set it up as a workshop or demonstration in an environment you can control and with a sales and pricing process you can direct.

For this event, ’sale‘ doesn’t need to mean ’discount.‘ An exclusive, limited-time purchasing period for new and loyal customers is an incentive for them to get the latest, greatest or most innovative products before everyone else.

[box style=”gray,info” ]How to Better Manage Your Business Debtors[/box]

4. Shorter payment windows:

You could combine upfront payments with shorter terms. It’s best to position the shorter terms as an offer with something to act as an incentive for paying early, like a small discount.

A better option is a small gift or other kind of added-value offer. You could also position this as both a thank you and an incentive to keep customers consistent with shortened terms.

5. Loyalty programmes price:

Establish a loyalty programme and add enough value so you can charge a nominal joining fee of around R25. While there may be some initial costs upfront for producing loyalty cards or customer tracking, the extra cash generated over time ends up going straight to the bottom line.

Not only can you create a highly targeted list of better qualified customers, but this is a simple way to easily generate cash quickly just by asking for it.

6. Don’t discount:

Rather offer additional incentives such as free home delivery to assist you in closing the sale. Focus the customer on the benefits and quality of your product, not the price. Don’t be afraid to lose the sale. That way you will attract only A and B grade customers.

The key is to test and measure what does and doesn’t work because no strategy will work perfectly for you every time.

If you market correctly and measure everything you do, keeping your winning strategies and killing your losing ones, you’ll eventually find your cash flow ‘sweet spot’, which will lead to larger profits, increased cash flow and a more successful business over time.

Creating repeat business

Test everything you do to ensure you’re controlling costs and meeting customer needs.

 

Harry Welby-Cooke is the Master Licensee for ActionCOACH South Africa. He is also the President of COMENSA (Coaches and Mentors Association of South Africa). ActionCOACH is the world’s largest executive and business coaching company with operations in 39 countries. It is also on the list of the top 100 franchises globally. As a highly successful Business and Executive coach, Harry is a master of teaching business owners how to turn their businesses around and accelerate their growth. Email him at harrywelbycooke@actioncoach.com or call 0861 226 224

Cash Flow

Should You Buy Second-Hand Luxury Cars?

Not convinced? Read on below for reasons why you should choose a used luxury vehicle.

Entrepreneur

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As an entrepreneur or business owner, you are likely interested in keeping up your image to current and future clients. This can be done by wearing a sharp suit to meet an investor, ensuring that your office space is kept clean, neat and modern, or by driving a luxury vehicle to a client meeting. Now, a luxury vehicle might sound expensive, but pre-owned cars and used cars for sale provide you with an affordable option for any luxury vehicle.

You will be able to find cars online that will suit your needs and budget. For example, you can search for used cars on a dealership website and find a diverse array of luxury car options. Remember, just because you are looking at second-hand cars, it does not mean that you are compromising on quality.

Additionally, your vehicle finance and car insurance payments will be more affordable if you choose used, pre-owned or second-hand cars. Not convinced? Read on below for reasons why you should choose a used luxury vehicle.

You’ll be getting more for less

Whether you will be purchasing a pre-owned vehicle for company use or for your own transport purposes, you will still be spending less and getting “more” car. Second-hand luxury vehicles are more affordable but you will still be driving a high-quality car. And you might even be able to afford car finance for your dream car if you search for second-hand cars for sale.

Brand new luxury vehicles can often reach exorbitant prices, with some costing as much as R300 000. A used luxury vehicle might only reach R150 000, which is much more affordable. While you might not be getting the latest model Mercedes Benz, you will still be able to buy a vehicle with all the bells and whistles. The lower price tag will also bring with it a lower insurance quote from some car dealers. Be sure to keep an eye on the latest car news to find used luxury car deals in your area.

There is slower depreciation

One of the major issues of buying a brand new car is that it will depreciate almost immediately after you drive it off the sales lot. Some vehicles can lose over 20 percent of their value within the first 12 months of ownership, but this is much lower when purchasing used cars, whether they are luxury vehicles or not.

This means that the car’s value for money will not change as drastically, saving you money in the long run. While a used or pre-owned car will still experience depreciation, it will not be as swift as a new car. You might lose a significant amount of the value of a new car, meaning that if you decide to sell your car after five years, you will be losing a lot of money in the sale. Ask the dealer what the depreciation rate will be for the car you would like to purchase before making a final decision.

You will receive all the same features

Simply because you are buying a used luxury car, this does not mean that you are compromising on quality. In fact, you will still be receiving the same features as a new car but for a lower price. And this includes all the safety features, which are vital if you will be using the car for business purposes.

Some of the features include electric windows, a central locking system, leather seat covers, and a USB and Bluetooth sound system. You will find that even a five-year-old luxury car will have these features and you will be able to have a smooth and comfortable ride. This is especially convenient and cost-effective for business owners who want a company car to suit their image and their budget. You will be able to provide a comfortable car for your employees without overspending.

You will still be covered by a warranty

Many pre-owned luxury vehicles will still be covered by their warranty, which means that any damage that occurs while it is still covered will be paid for. For example, there might still be coverage for dents on your warranty which is useful if you are in an accident or if there is weather damage done to your vehicle.

You could also invest in an extended warranty, meaning that you will be covered when the current warranty expires. Be sure to do some research into what the best options are and ask for one which suits your specific needs and budget. You should also look online for reviews of different warranties to see which will best suit you. Look for a cover that has all the essentials as well as some of the extras which you feel you might need. Speak to your employees for advice on what they feel would be the best option for how the vehicle will be used, if it will be a company car.

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Cash Flow

How To Avoid The 3 Plagues Of The Financially Disabled

The quickest way to make more money is to better manage the income you already have.

Tucker Ferwerda

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How consistent is your cash flow? Seventy-eight percent of Americans live paycheck to paycheck, and American consumers aren’t the only people affected. Many business owners struggle financially. Twenty percent of businesses go under within their first year of operation. People spend the first 18 years of their lives of schooling and trial-and-error, only to still find themselves in a rut for the rest of their lives – unless they master the art of managing money and cash flow.

Don’t become a part of a measly percentage. Rise to the top, and create something that will last. Create something that is evergreen that will also stand up against the powerful winds of the economic world.

If you’re looking to fight the financial epidemic and become financially free, whether you’re an uprising entrepreneur or a seasoned business owner, here are the three plagues of the financially disabled that you need to avoid at all costs.

1. They allow fear to guide all their decisions

Negative emotions will slow down your progress. Avoid being angry, negative, fearful and doubtful. Remove these feelings and replace them with hope, faith, power and positivity. Your vision, clarity and judgment become cloudy when you hold onto negative emotions. This prevents you from staying productive and leveling yourself up.

It’s not easy and will take some time to replace the negative feelings with positive emotions. Be patient with yourself and become self-aware of your daily thoughts. Are the majority of your thoughts negative or positive? Catch yourself red-handed in the act of thinking negative thoughts and quickly replace them with positive thoughts. Doing this consistently over time will change your habits which will eventually turn you into the money-making machine that you already are.

Related: Outsmart Cash Flow Problems With The Right Financing

2. They avoid learning from others

One of the quickest and easiest ways to fast track your success is to get help. Avoiding coaching and proper mentorship from the right people will keep you riding shotgun in the slow lane. Just like athletes need coaches and training to quickly reach the next level, you need to find the right help from those who are anywhere from two to 10 steps ahead of you. Don’t do any more than this. If you find someone who is too far ahead of you, you risk spending way too much time and money for something that is far out of reach.

You can recognise the pioneer by the arrow in his back. Don’t be a pioneer. There are people who have gone before you who can show you the cliffs and roadblocks to avoid. Here is what you should do instead – pay to play. You can either pay someone by exchanging your time or services for their specific knowledge or by paying cash.

This should be someone that you trust, that has consistent results and is doing what you want to do. Follow them for at least two to three months on social media to find out if they are real.

3. They spend more money than apply action

Does this sound familiar? You spend thousands of dollars on different products, services and events only to find yourself still in the same place? You become motivated for a short time only to become extremely frustrated that you’re not going anywhere. Stop doing this. Please refrain from buying too many things all at once. What you need to do instead is follow a 3-step method – scan, soak and apply.

First, scan what you need to learn. Just like I teach my students, learn what you’re trying to learn as fast as possible without trying to understand everything. Next, you need to soak it in. Learn what you need to learn for understanding and context. You will notice that you are understanding more, and you’ll catch things that you missed on the first scan of the information. Since you’re understanding more, now is the time to apply what you’re learning. Take time, be patient and apply the steps you’re learning. Do this repeatedly until you’re consistently taking action on what you learned.

By avoiding these three plagues, you’ll instantly start to notice yourself getting more done with the time that you have. This will help you stay on track to becoming financially free and living the lifestyle you want. The best time to start was yesterday. The second best time to start is now.

Related: 6 Things You Need To Know About Profit And Cashflow

Do your future self a favour. Pick one of the easier steps above and start working on it. After you feel comfortable with a step, pick the next best. Then complete the last step, and you’ll start to see the cash flow coming in easier and more consistently.

This article was originally posted here on Entrepreneur.com.

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Cash Flow

The Future Of Finance: Are Universities Prepared?

Producing graduates for the world of finance is an expensive, specialised and time-consuming business. Can universities keep pace with the requirements of a rapidly changing industry?

Entrepreneur

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Financial services needs a highly-skilled workforce and higher education institutions are struggling to keep up, especially as persistent technological progress disrupts financial institutions and the markets and societies in which they operate.

At the heart of the problem lies a traditional university system that can only produce a relatively small number of graduates for the sector through programmes that may take three to four years to complete. To compound this, universities are expensive and highly selective, which effectively bars many from getting the training they need.

Professor David Taylor, Director of the African Institute of Financial Markets and Risk Management (AIFMRM) at UCT, is considering the long-term. He doubts that the current structure and cost of a traditional postgraduate degree is either effective or sustainable.

AIFMRM is one of the country’s pre-eminent postgraduate training facilities offering three specialised Master’s degrees that produce roughly 60 highly-skilled graduates for the financial services sector each year. The Institute’s MPhil specialising in Mathematical Finance was recently ranked 59th worldwide, and Taylor says that AIFMRM works closely with industry to ensure that the graduates they are delivering are aligned with industry needs.

“We know that AIFMRM’s offering is excellent for current financial industry needs,” he says, “but as a forward-thinking institution, we need to be contesting the status quo too. Perhaps it is time for industry and educators to assess what will be needed in the future and to find a model that will be affordable, accessible, efficient and sustainable.”

 Is a traditional degree sufficient for an exponential world?

Akin to Taylor, Colin Iles, consultant and CxO of the Absa Equinox Leadership Centre, believes the traditional degree system may be too slow to respond to changes in any industry. “Educational content has to be curated in a safe and structured way, with approved credits and standardisation – it is a slow system, and there is a danger of taught-content falling behind what is relevant,” he says.

Iles suggests that some of today’s necessary skills have already deviated from those acquired in a traditional degree programme. He says, “The FinTech movement has given rise to thousands of small entrepreneurial companies trying to solve various problems in unique and differentiated ways. Instead of a comprehensive degree that tries to cover every economic model and mathematical proof, you may become more relevant, quicker, by focusing on what you need to learn for that particular space and time. Then apply your knowledge and learn faster by actually building something in an entrepreneurial environment.”

Iles believes the way forward involves re-defining the purpose of the modern university. “If its purpose is to prepare people to be valuable citizens in the global economy, then the traditional university model, which has been in place for hundreds of years, may be outdated for a world that is exponential.”

He adds that universities could offer more customised, shorter sets of focussed learnings, at scale, online. “Even in complex topics, online learning is proving to be highly effective, with rapid feedback, self-paced learning and class interaction.”

Online education is a rapidly growing field. Class Central, which curates a catalogue of Massive Open Online Courses (MOOCs) recently reported there are currently 11 400 MOOCs provided by over 900 universities, catering to 101 million students worldwide. Business and technology comprise almost 40% of the available courses. There has also been a concurrent increase in online degrees.

Blended and flexible offerings may be the solution

CEO of edX, Anant Agarwal, believes that future-proofing higher education starts with re-inventing the degree. In a recent Quartz series on the future of college, he predicted that employers will soon be searching for what diverse skills people have rather than what degree they possess. So, programmes need to become more flexible.

Agarwal imagines a future where students could, for example, combine humanities skills with tech skills, or analytical skills with design skills – building a degree for a customised skill-set. Smaller, modular credits could combine into a degree from a variety of universities.

“This will be good for higher education institutions. A college or online platform could specialise in certain subjects and offer the components of education their instructors truly excel in. When each university can focus on what it does best, both the educators and the educated will benefit,” says Agarwal.

He also notes that students pursuing on-campus degrees will benefit from this model as they will be able to augment their education with specialised, online modular content from other institutions.

Kumeshnee West, Director of Executive Education at UCT’s Graduate School of Business, agrees that technology can augment face-to-face learning – but not replace it. She advocates a balance of online and classroom learning – especially when it comes to the development of soft skills and emotional intelligence, which are key strengths needed in the workplace of the future according to the WEF Future of Jobs Report 2018. 

The rise of life-long learning

Gert Kruger, Chief Risk Officer at Rand Merchant Bank, believes that institutions such as AIFMRM that provide multi-skilled graduates from a variety of academic backgrounds are the first step in keeping pace with what industry needs.

“Also, we need to teach people how to think and how to learn new skills all the time. Possibly teaching more of the soft skills – collaboration, creativity, flexibility and adaptability – may make people adaptable enough to continue learning and re-learning. Organisations need to re-skill people with higher frequency than in the past. Importantly, life-long learning needs to be organisation-wide.”

He adds that the financial industry is continually evolving, but it is challenging to anticipate how organisations – and the skills they require – need to change. However, one thing is clear – “if we do not evolve, we will stagnate. Organisations need to keep abreast of change by making ongoing incremental refinements.”

This is true for universities as well, says Professor Taylor. “Universities are well placed to use their resources and deep expertise to build on what they have, to remain relevant in the future.”

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