- or Your Business? 

Don't get me wrong, I'm a firm believer in managing cash flow. Cash flow problems are the primary cause of business failures. But, what I've noticed recently is that many of the owners I've been talking to seem to be making their important business decisions based on the balance in their bank account. I'm not an advocate of spending what you don't have, but I believe that business decisions affecting your future should be made on the basis of a plan - not the balance in your checking account. When a decision is made based on that balance, it's probably being made months too late.

 

Cash flow is the combination of revenue and expenses. To a great extent it can be forecast - your budget - and controlled. Yes, you are in control of both revenue and expenses. Too often I see cases of businesses that cut expenses when revenue falls but fail to make any effort to increase revenue. In most cases I find that they have cut both their marketing expenses and the time spent on marketing. This usually results in further loss of revenue and the start of a vicious downward spiral.

 

When I work with people who have seen a decrease in revenue, we start by focusing on finding ways to increase that revenue. Very often the first step is to make sure they are keeping the customers they do have. This rarely requires additional expense, but it does require time and effort. Increasing sales is a similar process, getting existing customers to buy more and adding new customers. The new customer aspect requires a review of the marketing approaches currently being used and measuring results against expenses. Yes, stop spending money on the stuff that doesn't bring in new customers. But, increase spending on the things that are working.

 

If you are tracking your marketing expenses and results you will have a very good idea of when that investment will pay off in terms of customer purchases and revenue. You can forecast this in your budget and then begin managing the budget, and your business, instead of your bank account.

 

 The easiest way I know of to ask good questions is to begin each one with "What", "Why", When" or "How". Then listen carefully to the answer before asking your next question. You will soon learn to control the direction of the conversation while letting the other person willingly reveal much of what they are thinking and feeling. Making a sale is about meeting their needs with an appropriate solution - it's much easier when you actually know what those needs are.

Does it feel like Social Media is a tsunami about to overwhelm your ability to participate? Don't be concerned, just continue to participate. As with any new technology it will take time to reach equilibrium. Remember that the point of the exercise is to form meaningful relationships. I've always found that in order to be meaningful a relationship must have a face-to-face component. Social Media isn't a substitute for that, but it can create more opportunities to interact. Use it effectively.