Five ways you can keep that cash coming in

In fact, a rich 'free cash flow' figure is a sure shot way to attract investors, which will take care of rest of the things.

Oct 27, 2014 11:10 IST India Infoline News Service

When into a business, an owner may find himself surrounded by too many attention seeking goals. However, the one that assumes prime importance over others is a surplus cash flow. While other things like generating sales and new clients are important, but none of it could hold up for a long time if a business lacks cash flow. In fact, a rich 'free cash flow' figure is a sure shot way to attract investors, which will take care of rest of the things. As per a rule, a business owner should retain 10% to 20% of business revenues to utilize it for growth purposes. A business can keep its cash flow growing through these five simple ways.
 
Know your expenses: A business should not indulge into steep discounting of its products and services untill and unless it is sure about the cost and impact of such actions. Too much of discounting could adversely impact cash flow and could even pull it into negative. A business without profit could not be run for a longer time.
 
Altering discounts by bundling products: Instead of going into a dicounting mode, a business owner could simply offer a product or service bundled along with the basic offering. The bundled product or service could be offered at a reasonable price which will act as a value addition to the core product. For instance, giving away a maintenance service for a year against a nominal charge is a great value addition.
 
Pre-Sell concept: A business that aims to sell its products or services as soon as it is launched could employ pre-sell technique. Through this method, a business could help give consumers time margin to plan for their future shipping and draw more new people. 
 
Back-end Product or Service: A business could try to generate revenues through back-end product or service if they feel that their initial offer would not make new customers. This means that the first service or product could be offered for a discount, but the price increases for subsequent product or service. For example, a cab-running business could charge less for first 10 Kms and then charge slightly higher above this mark.
 
Repeat Shoppers: Some businesses largely depend on repeat shoppers for its survivors like any retail business. Hence, ensuring that customers do return to these businesses is vital. Programs like loyalty plans, festival bonanza and free give-away are some measures to keep customers on the hook.

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