Here’s how to get consistent cash flow in your business

The number of businesses that fail within the first year or two is high. Massively high. There are many reasons for failure but one of the reasons is that the bills are consistent but the income isn’t. The income rises and falls as the business owner learns how to market, sell, and deliver their offering.

The sooner you can build your business to be consistent, the higher chance you have of beating the odds and surviving to year 3 and beyond.

So how do you get consistent cash flow in your business?

The only way to do it is to build a consistent sales funnel.

A sales funnel is the system in your business that attracts people toward you so they learn more about you and become prospects and then customers. I content that sales funnels are the most important part of your business because they’re the tool you use to get customers and make money. (I wrote an entire book on it called The Sales Funnel Bible #shameless plug)

So, how do you build a sales funnel that runs consistently?

You need clearly defined steps that are systematized (and preferably automated), and you need a way to keep prospective buyers in a holding pattern.

Let’s break that down…

CLEARLY DEFINED STEPS THAT ARE SYSTEMATIZED

Your sales funnel is made up of a series of steps. These steps are defined by the mindsets that your prospective buyers go through as they journey from “I have a problem” to “This company can help me solve my problem.” Along the way they’ll transition through mindsets like “I can live with this problem” to “I wonder if someone can help me” to “There are several companies that can help me solve this problem” and so on.

So, whether your prospective buyer has to transition through just a few steps or many steps, you need to figure out what those steps are (approximately) and then help the prospective buyer to move through them.

Once you’ve figure that out, you can systematize each step to some degree. Automation is one type of systematization but there are other ways you can systematize it — even if it’s just something as simple as writing out templates so you can customize them when a prospective buyer reaches a certain point in your sales funnel.

By systematizing, you attract people into your sales funnel and move them through with as little effort on your part as possible. (It’s a balance — you’ll want to maintain some visibility and control over the process and it might make sense to build a personal relationship with your prospective buyers. But all of this can be managed through some well-thought-out systematization).

KEEP YOUR PROSPECTIVE BUYERS IN A HOLDING PATTERN

This is the more challenging part. For consistent cash flow, you need to find a way to keep your prospective buyers in a holding pattern. By “holding pattern” I mean: you need to find a way to keep them in your sales funnel without necessarily buying from you today.

You do this through ongoing communication that adds value to them, and makes offers, and promises to add value in the future. My favorite way is to use email or print newsletters, although there are other ways to create a holding pattern.

You should do this while they are still in the Lead stage (that is: they’re learning more about your business and weighing their options). In my opinion, the Lead stage is the best stage to put people into a holding pattern because they are still seeking out information, which positions them perfectly to sign up for your newsletter or some other ongoing communication.

(If you wait until they are at the Prospect stage, they are already getting serious about buying and your newsletter will either entice them to buy right away or will push them out of your sales funnel because it seems to push them backward in your funnel).

HERE’S THE BENEFIT OF A CONSISTENT SALES FUNNEL

By building a sales funnel that systematically attracts people in and puts them into a holding pattern, you create a list of people that you can sell to very easily whenever you want to. This will have a huge impact on your business and its cash flow: An inconsistent business realizes that it needs more customers so it goes out to find them, creating an inconsistent cash flow because of the time lag between finding a customer and getting paid; A business with a consistent “holding pattern” sales funnel already has a bunch of prospective buyers in a holding pattern and can just pluck out a few from the holding pattern when more customers are needed.

The top action to take right now to get more customers immediately

Do you want more customers? Every business does. Here’s the very best thing you can do right now to start getting more customers immediately:

Narrow your target market.

That’s it. It seems simplistic and even counter-intuitive. After all, why would you narrow your available customer-base if you want to get more customers?

Here’s the answer: The bigger your potential market, the harder it is to speak clearly and compellingly to their problem. Conversely, the smaller your potential market, the easier it is to truly connect with their problem and demonstrate how effective your solution is.

Here’s an example: If you have a friend who has a problem, you can give them advice, assurance, and a little helpful guidance to fix their problem. You’re laser-targeting your solution to your friend’s very specific needs. But what if you have several friends who each have the same problem? You might not have enough time to help each one individually so instead you help them generally or as a group. Your recommendations will still be targeted to their problem but it will be slightly more generalized. But to extend the analogy further, most businesses tell all of their friends about the solution, whether or not their friends have a problem.

That’s how it works in business. In a perfect world, you have one customer with a problem and you work with them until the problem is solved. Your message to them, as well as your advice and recommendations, are laser-targeted. However, that is not very profitable. So you need to back up just a bit and find a bunch of people who each share a similar problem and you can communicate to all them a little more generally. Unfortunately, many businesses (the struggling ones, at least), share their solution with anyone and everyone, regardless of whether or not they want to hear it. One is not enough, “everyone” is too many. The best thing to do is find the group in the middle — those who all share the same problem.

If your business is struggling a bit, or even if it’s humming along nicely but you’d like to get more customers, the very first thing you need to do right now is to identify your target market… and be as clear and specific as possible while describing a fairly large potential base.

If you’ve been in business for a while then you have some examples of previous customers to draw from. Find the ones who are the most profitable, the most positive, the ones who tell others about you the most enthusiastically… and figure out what is similar about them.

Then, look at the people who didn’t become customers, as well as your least profitable and highest-maintenance customers. What characteristics do your best customers share that these “worse” customers and almost-customers do not share? Try to identify the characteristics that DON’T describe your customer-base.

Once you’ve done that, you have a pretty good idea of who IS and ISN’T your ideal customer. Then hone your marketing to meet those specific people.

And if you haven’t sold anything yet, then give it your best guess but be prepared to refine it further — perhaps even dramatically — if you need to.

Let me give you an example from when I was doing a lot of a freelance writing.

I started by writing for anyone I could find. Over time, I found that I was being asked to write a lot of business (specifically B2B), financial, and real estate content. Later, I realized that my best customers were from the financial and real estate field, particularly in the US. And even later, I learned that my very favorite and most profitable customers included real estate investors, debt collectors and credit experts, and lenders. With each “step” toward a more specific customer base, my marketing was refined, I closed more deals, and my prices went up (because I was more specialized and there was less competition)!

So if you’re sitting at your desk and wondering what you can do right now to improve your business, drop everything else and refine your customer-base. Get very specific and narrow them further than they have been. Trust me, it’s the best thing you can do for your business right now.

Who are your ideal customers?

Your ideal customers are the ones who will suffer if they don’t buy what you are selling.

Your ideal customers are the ones who will lose money because they haven’t invested in your solution.

Your ideal customers are the ones whose lives will be worse because they haven’t met with you or agreed that your product or service can help them.

Your ideal customers are the ones who are held back because they haven’t gained access to your offering.

Your ideal customers are the ones who haven’t yet figured out that they have a problem… and their quality of life is lower because of it.

Your ideal customers are the ones who are struggling with what they currently do.

Your ideal customers are the ones who are suffering because their existing choices aren’t meeting their needs.

Your ideal customers are the ones who don’t just have wants and desires and dreams… but a real and substantial and costly problem.

Your ideal customers are the ones who have the most to lose.

The needier your potential customers are, and the costlier that need is in their lives, the better.

Find those people, show them the costs of their existing situation, then reveal the fastest, easiest, most painless, and the very best way to invest in a new solution — YOUR solution.

(PS, If you don’t believe your solution is the fastest, easiest, most painless, and the very best solution then improve your solution or find a new one or get out of the business).

100 small business strategy questions

Many small businesses are fueled by passion. They start because an entrepreneur has an idea (or is sick of working for a boss), they grow because their ideas solve a problem and somehow that solution is communicated to the marketplace.

Unfortunately, many small businesses fail… even ones that are seemingly successful and make profitable sales. The reason is, they’re simply existing day-by-day, sale-by-sale, without any real strategy or long-term vision to give their existence any direction.

If you’re an entrepreneur, answer these 100 small business strategy questions. The answers will help you to highlight areas of opportunity that you can exploit and areas of concern that you can mitigate. Bookmark this page and come back to it regularly to work through these questions every 3 to 6 months.

With your answers, create a list of to-dos that you can act on until you come back to these questions again. [Note: Since publishing this list, I have written individual posts about some of these strategy questions so I’ve updated this list with the links to those other posts.]

  1. What does your business do?
  2. What does your business sell?
  3. What does your business stand for?
  4. What parts of your brand truly reflect your current business?
  5. What parts of your brand do not (or no longer) reflect your current business?
  6. What are the top 10 benefits your business provides?
  7. Who is your perfect customer?
  8. How are you adding value?
  9. What are your products’ or services’ biggest flaws?
  10. How do you define a lead?
  11. Where are your leads coming from?
  12. What demographic are your leads?
  13. How are you creating leads?
  14. How are your competitors creating leads?
  15. How will lead creation change for your industry in the future?
  16. How do you define a prospect?
  17. What is your lead-to-prospect ratio?
  18. What demographic are your prospects?
  19. How is your prospect demographic different from your leads demographic?
  20. How are you turning leads into prospects?
  21. How are your competitors turning leads into prospects?
  22. What objections do your prospects have?
  23. What objections do you NOT have an answer for?
  24. How do you define a customer?
  25. What is your prospect-to-customer ratio (close rate)?
  26. What demographic are your customers?
  27. How is your customer demographic different from your prospect demographic?
  28. How are you converting prospects into customers?
  29. How are your competitors converting prospects into customers?
  30. What has caused you to lose a sale?
  31. How do you define an evangelist?
  32. What is your customer-to-evangelist ratio?
  33. What is your evangelist demographic?
  34. How is your evangelist demographic different from your customer demographic?
  35. How is your relationship with your customers?
  36. What were your 3 most successful marketing campaigns?
  37. What were your 3 least successful marketing campaigns?
  38. What marketing and sales activities are you using in each stage of your sales funnel?
  39. How do you measure company-wide success?
  40. How do you measure personal and/or employee success?
  41. How are you improving your relationship with your customers?
  42. How can you improve the process for receiving and acting on feedback from customers?
  43. How are you encouraging repeat sales?
  44. How are you encouraging upsells?
  45. Who else can use your products or services that you aren’t currently serving?
  46. What is your business model?
  47. What other peer-businesses use the same business model?
  48. What can you learn from peer-businesses that use the same business model?
  49. What other businesses (in other industries) use a similar business model?
  50. What can you learn from businesses in other industries that use a similar business model?
  51. Who are your top 3 competitors?
  52. Who/what are your indirect competitors?
  53. What does the most successful businesses in your industry do that you don’t do yet?
  54. Why would someone buy from you instead of your competition?
  55. When should someone buy from your competition instead of you?
  56. What are your competitors doing differently?
  57. What are your competitors doing better than you?
  58. What are your competitors doing worse than you?
  59. How are your relationships with your suppliers/vendors?
  60. How can your supplier/vendor relationships be improved?
  61. What does your organizational chart look like and what strengths/weaknesses are the result?
  62. What are the next 3 roles you need to hire for?
  63. What was the last thing you tested in your business?
  64. When was the last time you tested a price change and what were the results?
  65. What political changes do you see affecting your business/industry?
  66. What economic changes do you see affecting your business/industry?
  67. What social changes do you see affecting your business/industry?
  68. What technological changes do you see affecting your business/industry?
  69. What financial best practices have you implemented?
  70. How have buying habits changed in your industry?
  71. What trends are influencing buying habits?
  72. How will buying habits change in the future?
  73. How has your industry innovated in the past decade?
  74. How has your business innovated in the past year?
  75. Where does your business plan to innovate this coming year?
  76. How are you investing in your business’ growth (i.e. innovation, new equipment, etc.)?
  77. What is your plan to scale up your business?
  78. If you had to get rid of 90% of your customers, what 10% would you keep?
  79. If you kept 10% of your most profitable customers, what would that demographic look like?
  80. How can you increase your ideal customer base?
  81. How can you decrease your less-than-ideal customer base?
  82. Where are people talking about your business online?
  83. What are people saying about your business online?
  84. What is your plan if your industry suddenly received a lot of bad press?
  85. What is your plan if your business suddenly received a lot of bad press?
  86. What is your plan if your marketing went viral and you suddenly had 10x the customers?
  87. What contingency plans do you a have in place for natural disasters?
  88. What would happen to your business if you were unable to work?
  89. What has changed about your business since you started?
  90. How has your income trended since you started?
  91. How has your profit margin trended since you started?
  92. What plans do you have to increase income next year?
  93. What plans do you have to increase profits next year?
  94. Where do you see your business in 1 year?
  95. Where do you see your business in 5 years?
  96. Where do you see your business in 10 years?
  97. What strengths/assets can you leverage for growth?
  98. Where are your blindspots?
  99. What are the top 3 problems keeping you from advancing to the next level in business?
  100. What about your business, industry, or customers keeps you awake at night?

6 quick sales funnel tips to make more money today

6 quick sales funnel tips to make more money todayRunning a business means managing a sales funnel. Sometimes you need to roll up your sleeves and do some serious work in your sales funnel to fix things that are broken or to optimize it for more profit. But other times, you just need to make minor tweaks to get a quick “pop” in you business.

Here are six quick ideas to get more money out of your sales funnel today

1. Draw out your sales funnel

You’ll gain such a clear understanding of how essential your sales funnel is to your business, plus I usually find that just drawing it out reveals some great opportunities.

2. Create just one clear call to action in your site

It’s easy and tempting to put in all kinds of calls to action — “Contact us” or “download this” or “subscribe here” — but if you have one offering, make it the front-and-center action that website visitors should take.

(Disclaimer: I’m not saying that you should take the other stuff off of your site. Just make one of those things the primary action).

3. Offer a dramatic one-day bonus

Create some short-term urgency by releasing a huge bonus product or service with the purchase of a a popular product or service you already have. Keep it short-term (a 24 hour period is good). See what kind of response you get. Find out if more people are being because they want the free bonus or because it’s a great deal.

4. Announce that you are about to raise your prices

Hey, we all need to raise our prices at some point and most business owners silently raise their prices and hope that there isn’t a lot of backlash. Work this to your advantage by announcing — via press releases and social media — that prices are going to rise on a specific date. (If you sell services, make sure you let people know that they can buy now at the lower rate but receive the service after the price increase).

5. Get back in touch with old buyers

Confession: I find it pretty easy and fun to go after new business so it’s really easy for me to finish a project and then not get back in touch with previous clients. I know I’m not alone here. Lots of entrepreneurs let old customers dry up. Spend some time today combing through your past few years of business and getting in touch with your top ten customers from there. Let them know that you have some availability or extra products and would love the chance to serve them again.

6. Double your lead-generation efforts today

The more leads we generate, the more prospects we end up with and the more customers we can convert those prospects into. But sometimes, lead generation becomes a big strategic endeavor when really just a few extra minutes or hours of effort can have a dramatic, positive impact. Don’t think long-term, just go out and try to double the amount of leads TODAY.