Consistent cash flow is an important indicator of how long your business would last, especially when you’re a new business owner. Otherwise, why worry about other matters when your business is not around anymore? Here’s how to start a business with continuous cash flow.
Start Multiple Income Streams
Try and start multiple income streams. You don’t know which will pick up and which will die. Hence, start by making an inventory of what services you can offer and create added value. Why service? It requires little capital except for setting up a website and running online advertisements.
Get your name out there as well by partnering with agencies and going to career fairs. There’s something powerful with a face-to-face meeting. In fact, if you need a part-time job to pay your bills, get it. However, remember to keep your business as the focus.
Bottom line: even if it’s something you’re not too passionate about, consider doing it temporarily as an income stream. There are plenty of online business ideas out there that can help your cash flow while you reach your goals.
If you have spread your finances too thin or are unsure what service to offer, consider dropshipping. A traditional business requires you to buy an upfront inventory at a minimum order quantity. Sure, you bought it at a low price. But what if you could not sell any? Only 50% of Shopify stores generated sales.
AliExpress dropshipping, on the other hand, allows you to pull items from your suppliers and place them on your Shopify. Only when a customer ordered, you will make an order from the supplier who will then ship to your customer. All this happens without going through you.
Now, you may think about why anyone would buy from you when they could directly buy from AliExpress? You act as an important curator and filter of the myriad of suppliers in AliExpress. It can be a viable business model.
Encourage Repeat Business
Many people are creatures of habit. We would rather repeat our order from a verifiable and tried source than a completely new platform. That is why you want to be exceptionally careful with customers who made their first order.
But once you have gained their trust, don’t stop there. Encourage their repeat business. You can offer them loyalty programs, VIP offers, frequent-shopper programs and free gifts.
Also, try to see if you can offer them a bundled service at a cheaper rate with a retainer fee for half a year to one year. That way, your cash flow is secured for a longer period instead of a project to project basis.
Get Back Your Money
As a new business owner, we may get into the trap of letting our customers pay later, getting early adopters of our service or products to make us happy enough. But profit is only profit when we collect the money on the invoice.
Offer incentives for your customers to pay early and penalties for paying late. Late payment can create a financial hole in our small business. We need to set them straight, from the start, to pay you on time. It is the key to positive cash flow.
Bring in Tech
Managing money is time-consuming and can take 80% of a business owner time. However, more time should be allocated to strategise and grow the business.
To solve this, control your cash flow by using accounting software instead of hiring an accountant. Offering you real-time view with inbuilt processes to track certain errors, you can count on it to help you make quick and informed decisions.
Although some experts suggest getting an angel investor or crowdfunding, it might not be easy to get visibility and investment unless your business idea is highly promising or unusual. Therefore, the ideas above are more practical and realistic to maintain a positive cash flow for a new business.