Without a doubt, a steady cash flow is a necessity when it comes to a business’ success, however; cash flow does not have to influence your growth, generosity can make a huge difference. Too much generosity with your pricing or your payment terms will do more harm than good but be smart, and you will achieve a happy balance between a stable cash flow and business growth.
Get the price right
When it comes to pricing, many companies will look at their competitors or calculate a price that covers their costs while making a small profit and it is a proven way to make money but consider a market trader, the price of their products fluctuate with the value customers place on them. A trader selling umbrellas will increase their prices as it begins to pour because of the increased value to the customer.
Of course, you are not going to change your prices as regularly as the weather changes, but the key point is that your product or service may be of immense value to the customer, meaning that they may be willing to pay a higher price for it. Consider the other, similar products/services on the market do you have more to offer a customer? If so, you can demand a higher price “Sure you can pay less for [alternative product], but it won’t be able to do X, Y, Z.”
We are all aware of the special events that businesses use to attract more customers, days like Black Friday for example. The problem is, events like this attract clients who are only looking for the best discount. They have little interest in your business and only care about the offers you have. Offer the best prices to customers who spend money throughout the year, reward loyal customers, and they will reward you with recommendations, testimonials and more custom.
In business, it pays to be generous just make sure you are directing your generosity to the right people. Unfortunately, cash is king, without a cash flow your business will fail. Take a look at your accounts, do you have a lot of customers that have outstanding payments? Consider contacting a collection agency, like Commercial Domestic Investigations to follow up with these clients and recover any money owed to you. This will ease the pressure on your credit control department and give them time to build lasting relationships with paying customers; to find out how we can help your business contact our team on 08444 159200 or email firstname.lastname@example.org.