Many new business owners struggle to move the needle on their cash flow. It seems like every gain you make on the income side of the equation is dragged back down by rising expenses. Thankfully, there are ways to increase cash flow and boost your purchasing power that you can get started on today. Here are some of the most effective.
- Explore Alternatives
Don’t have a lot of working capital? Consider trade finance alternatives like a revolving line of credit that allows you to fulfill orders even whilst waiting for invoice payments. You could also consider invoice finance and a number of other options for securing credit. Just be sure to do your research before selecting a provider.
- Low-Cost, High Margins
When you’re first starting out, it’s often best to go with products or services that are low-cost but offer high earning potential. Your brilliant but expensive ideas are best saved for once you have a steady cash flow and can afford to invest in product development.
Things like information products, online courses, consultancy, mentorship, and e-commerce are all low-cost and high margin activities worth considering. They don’t require massive amounts of stock, office equipment, or great overheads.
- Know Your Numbers
Most people have a budget that is often incongruent with their expenses. The goal should be to tie these two together by examining how much money is flowing out every month, and increase the amount of money that you can put aside to invest. Once you understand your numbers better, you can start to bring some predictability and steady growth to your cash flow and fast-track your path to true financial freedom.
If you find it difficult to stick to a budget, get a prepaid credit card with the lowest possible fee available, and only use the budgeted money that’s on the card. Once the balance dries up, you’re done until next month.
- Focus on Sales and Marketing
A lot of people spend time on administration, accounting, and attempting to create the perfect product when they should be focusing on income-generating tasks like sales, and marketing. These are the two most important functions of any business – marketing generates the leads while sales convert them.
If you don’t like sales or marketing, then you need to partner with someone who does or outsource these activities to an agency. You can even leverage free and low-cost marketing channels like social media to get the word out about your business without sinking massive amounts of capital.
- Go For Scalable Products
Make sure that what you’re selling is easy to scale and repurpose. A good example of this would be an online product that you can package as an eBook, course, and webinar, with personal coaching sessions available. You can sell a million courses without any additional overheads.
Remember to sell that which is valuable to the market as well. A product can be so niche that no-one wants it. You have to balance what you want to share with the world with what the market wants. This means knowing what’s on-trend and what people will pay for.
Test different products and services at different price points, do surveys, and find out what people are responding to. In the end, you’ll have a product you love which will also turn a profit.
The key to increasing your purchasing power is to do the work of increasing your cash flow, then you will see the magic happen. Your overriding goals should be to make more, spend less, and work smart.