There are a trillion upsides to being a business owner of an online company. One of the few caveats to this type of business is cash flow. Internet entrepreneurs like you and I tend to make our money in batches rather than slow and steadily. Some months I feel rich as a king and imagine how I could be living if every month was as profitable as my best month ever. Other months I become very conservative with my money and look at what expenses I could cut if things get bad.
That’s how it is in our line of work. Cash flow is the life blood of our businesses. Without it we can’t buy advertising, pay our vendors, create new products and do all the other things that grow and build our businesses.
Inevitably you will face a cash flow issue at some point while running your business.. The trick is when cash gets low you need some ways to get cash in quickly and steadily so this doesn’t happen again. There are some surefire ways to combat this problem. Below is a list of tactics I use whenever I see my business bank account dip below healthy levels.
1. Upsells and cross sells.
When I need to for my business I don’t bombard my customers with additional promotions and sales calls. Those tactics end up annoying your readers and usually cause higher unsubscribe rates. Instead I tried to squeeze more cash out of every sale I get. How do I increase the amount of money I get from each sale? I add upsells and cross sells.
Cross-selling is selling an additional product to a customer, usually one that can be used in conjunction with the product they are already buying. An example of a cross sale would be to offer customers headphones once they have decided to purchase an mp3 player.
Upselling is a bit harder to do because essentially you are convincing your customer to buy a more expensive product than the one they had originally intended to buy. Like tempting a customer buying chicken breasts with more expensive, organic chicken breasts.
Both of these are great tactics to get the customer to buy more from you without any extra effort!
Long time readers know my general rules for upsells and cross sells. The additional products need to be natural extensions of the main product. Plus they need to be offered at the appropriate time, only after an online shopper has added them to their shopping cart. And they need to be presented to the customer in the right way with wording like, “You may also be interested in.”
2. Continuity products.
A surefire way to generate consistent cash each month is with continuity products. Successful online entrepreneurs are moving past products people pay only once for and adding continuity products to their product lines. These are products that clients pay for again and again, on a regular basis; usually monthly, quarterly or yearly. Magazine subscriptions and newspapers are two examples of continuity products. You pay for them every year and they send you fresh content each day or month.
Fortunately you don’t have to own a magazine or newspaper to get the benefit of steady cash from your clients. Build a product or service into your business that your customers could use on a continual basis. For example, if you are an accountant most of your business will come during tax season, preparing your clients IRS forms and calculating the taxes they owe. You can offer your clients ongoing financial services like bookkeeping, bank reconciliation, and financial planning for a monthly or quarterly fee. These services will enhance your client’s business and in turn generate more cash for yours. One client at $50 a month would yield you an additional $600 a year. Ten clients at $50 a month would net you an additional $6,000 a year.
3. Reseller Programs.
Another way to generate cash without doing more work is to create a reseller or affiliate program. This will allow you to do the work once but keep the profits rolling in. In this instance you create a product, like an e-book or DVD set, and a sales letter to help sell that product. You create an affiliate program which allows others to sell your product while you still get a slice of the profits.
A great place to find affiliate products is Clickbank.com. This website offers thousands of products you can sell. You can create a product and post it on Clickbank.com so others can sell it for you. Clickbank.com takes care of payment processing and pays out the commissions to both you and the affiliate marketer each time a sale is made. Leaving you time to grow your business while enjoying incoming cash.
4. Sell Yourself.
The people that visit your website and frequent your business have put their trust in you to deliver value. That’s why they buy from you instead of the competition. Every time they buy something from you essentially they are buying you. You are the authority in your field and they want to know what you know. So instead of creating a product that delivers that information, offer yourself as the product.
Offer consultation service. This is a great way to generate quick cash for your business for two reasons. One is because people expect private consulting to cost big bucks. You can charge a premium for your services, thousands of dollars. The second reason is because your already have an established relationship with the people you offer your services to. They are on your newsletter list, have bought products from you previously or have frequented your website to get new information. This previously established relationship has cemented the idea that you are a valuable, trusted source of information that they want to learn from. It is easier to convince people who you already have a relationship that they could benefit from your expertise.
Typical consultation services include a pre-set number of emails, phone calls and block of time. You determine how much of these three things each customer is entitled to for a fee. You may charge them a monthly fee for your ongoing advice or one large upfront fee that grants them only a certain amount of time to get personal advice and help from you.
5. Open a business credit card with reward/bonus program.
Open up a business credit card to pay your vendors and bills with. This will give you an extra 30 to 55 days to defer payment, leaving you with more cash in your hands. The great thing about using a credit card to make payments is that the more cash strapped you are, the better this tactic works.
Combine that factor with the added bonus of a rewards system like frequent flyer miles or cash back and you’ve just put the icing on the cake. Now you can defer payments when you’re low on cash and earn rewards while doing it! The more you use the card the faster you can accumulate points. You may never have to pay for a flight or travel again if you use a credit card with a great rewards program.
Next time you notice your funds are running low in your business bank account try one of these five tips to generate quick cash. Continued use of these tactics will help ensure you never become cash strapped again and enjoy the benefits of regular, monthly incoming money.
