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.