The solution to a cash flow problem is often right at your fingertips. Fear and concern can keep us from piecing together answers that can make a significant difference. When cash-strapped clients call for a session, we turn over a few stones that are damming up their cash flow and often resolve the immediate problem with a few simple changes or action steps.
Some common oversights and mistakes made by business owners are directly related to a lack of confidence or self worth. Some are related to a fear of looking at, and understanding, their numbers and some are simply due to lack of experience or knowledge. If you identify with any of these roadblocks reach out to someone who can help so you can put yourself firmly in the driver’s seat. Here are a few ideas that might just get the cash flowing and profits moving.
Review your accounts receivable (AR) – Who owes you money? How long have these outstanding invoices been on the books and what are you doing to collect them? The longer you allow these invoices to remain unpaid the less chance you have of collecting on them. Small business owners are often afraid to “get too pushy” for fear of jeopardizing future business. Ask yourself if you really want to do business with someone who doesn’t value your services enough to pay you on a timely basis. Ask yourself if YOU value your services and how these outstanding invoices reflect on your own values. Remember, the efforts that you put into collections could be put toward marketing instead. But meanwhile, make some phone calls, send letters and, if necessary, have an attorney draft a letter for you and nudge the late pays into action.
Review your terms - What are the terms that you apply to your sales? Do your clients pay you upfront? Do they pay a portion in advance and have 30, 60 or 90 days to pay the balance? I once worked with a client who provided a service in the wedding industry. She collected 30% at the time the order was placed and the remaining balance on the wedding day. We changed her collection terms to 1/3rd upon booking, 1/3rd 30 days prior to the event and the 1/3rd on the day of the event. This simple adjustment really loosened things up for her and gave her a safety net.
Charge your worth – Okay, here’s the real issue for many soloists. Wow! I can’t count the times that I have heard people say they haven’t raised their fees in 10 years or that they feel sorry for people who can’t afford their services. There is nothing wrong with a little pro bono work, for sure, but please don’t end up in the poor house to compensate for someone else’s financial concerns. If you do offer a reduction in fees or product cost communicate the terms clearly and make sure it’s not to your own detriment. Also, do a little competitive analysis by researching services and products similar to yours to see what the going rates are. Do you hear yourself making excuses to support your decision to charge lower rates? If so, talk to your accountant, coach, mentor or advisory board to gain perspective. Unless you are submitting RFP’s for government contracts the lowest bid doesn’t always win. Re-evaluate your pricing and make sure you are valuing your services and products as much as you hope that your clients will.
Evaluate your expenses – Another common cash flow issue is created by excess spending. For example, do you have contractors that you send jobs to because you want to keep them happy? We know that outsourcing is a priority so that your time is free to build your business, but if this is done to excess during a low revenue point it can backfire. I often hear concerns like, “Janie has been doing work for me for years and I can’t cut down on her hours.” Yes, it’s difficult when you feel responsible for a portion of someone else’s income, but in the long run these temporary cuts will keep you in the black long enough to rebuild and move forward in a stronger position so that you can resume sending work their way.
In this down economy, some soloists are holding on to office space that may no longer be necessary. If you need to make cuts like this, look for the advantages and give yourself a timeframe to work within. If you have a plan that you believe will turn things around, schedule a date to reevaluate your spending. It’s easy to get caught up in the “what if’s” when we are making decisions like letting go of an office. What if things turn around? What if my clients find out? Make a list of your pros and cons and understand your financial limits. Removing the stress of added expenses will help you to focus more clearly on solutions and growing your business.
Where have you found money in your business? Is there anything you are procrastinating on? What solutions have worked for you? Share them here on Successful Soloist!
Facebook DataMine: Sell your browsing data, make some cash.
There’s a new Chrome Extension that is allowing Facebook users to opt out of the Facebook data-mining. The extension is called Facebook DataMine, developed by Jim Haas, a Game Maker at MegaEpic. Facbook DataMine allows my data to be mined (great pun with the name Jim).
If you need a refresher on what data-mining means, here the definition from the Facebook Data Mining Page;
Data mining, a branch of computer science and artificial intelligence, is the process of extracting patterns from data. Data mining is seen as an increasingly important tool by modern business to transform data into business intelligence giving an informational advantage. It is currently used in a wide range of profiling practices, such as marketing, surveillance, fraud detection, and scientific discovery.
In the less complicated words of Jim Haas;
Every time you use Facebook or one of the thousands of web pages using Facebook Connect your personal information is being collected and then sold to marketers and mysterious 3rd parties without your consent. Facebook gets rich and you don’t make a dime.
This extension blocks Facebook from tracking your movements on the web, which sounds great. The extension will block all data going to Facebook until it reaches 100,000 downloads. After 100,000 downloads this is where it gets strange. Facebook DataMine will then sell your information to third party websites and share the profits with you. This may excite you or in-my-case scare you. Users are able to opt out at any stage. My initial reaction was sweet, extra money, this extension is going to hit 100,000 installs fast. Then I pressed the install button and this popped up:
It made me think twice, “This extension can access: Your data on all websites…” I can’t just hand-over all that data to someone else. Then I thought some more, Facebook DataMine will let me own my data for a set time and then they will own it. Yes I will be reimbursed for selling my data. However if my data is to be sold by anyone, it should be Facebook. After all isn’t this another example of someone monetizing off the back of Facebook and leaving them out?
I trust Facebook. You’re all laughing at me right? But I do. It’s like the old saying, “better the devil you know”. Facebook launched in Feb 2004 and it took the site 5 years to become profitable. A part of me believes that Facebook should be making money for the amazing service that it is providing.
However if you want to make your data into money and have no issues with your data being sold, give Facebook DataMine a try.
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