Creating cash flow through internet marketing for your business Part 1

Entrepreneurship Is Focused on Creating Positive Cash Flow

In Creating cash flow through internet marketing for your business first time entrepreneurs are entering the marketplace wondering how to finance their business. Perhaps all you’ve known is receiving that regular paycheck from years of working for someone else yet are feeling challenged with how to generate regular income in your own business so you can support your family. Within a year, you want to give up on your entrepreneurial dreams and look for any job that provides regular income often in a much more desperate situation.

Existing business owners experience similar challenges. As a small business owner, you wear multiple hats in your business. This means that you often focus on all of the day-to-day tasks of running a business and overlook the few things in your business that actually bring in clients and cash flow. In an era where we have technology, that technology can be the greatest benefit or the biggest inhibitor as the volume of information distracts you from keeping your focus.

But let’s get real here – a business is not a business and you are not an entrepreneur until and unless you are generating positive cash flow. Cash flow is king. It is the lifeblood of every business. The business people we really respect are the ones who have lifted themselves up to success through sheer hard work, determination and strategy. They are the people who couldn’t get “seed funding” or “capital injections”, the ones that had to be smart and savvy to make ends meet and find ways to generate income from the start. They are the real entrepreneurs.

Entrepreneurs use their initiative to manage risk and generate profit but their focus is on acquiring or creating cash flows not on creating endless business plans that look good on paper but deliver nothing of value in the real world.

Cash flow is King, it is the lifeblood of every business. Entrepreneurs use their initiative to manage risk and generate profit but their focus is on acquiring or creating cash flows not on creating endless business plans that look good on paper but deliver nothing of value in the real world. if you want to create a sustainable business, the earlier you start thinking about how to shift your business model to create more passive, leveraged and recurring income, the more likely you will be in business a year from now.


Creating Cash Flow Is Easier Than You Think

So you might be thinking you’re consistently marketing, but is your business model set up the right way to have your clients engage with you while generating consistent income?

If you want to create a sustainable business, the earlier you start thinking about how to shift your business model to create more passive, leveraged and recurring income, the more likely you will be in business a year from now.

Passive income is income received on a regular basis requiring little effort on your part to maintain it. Examples might include royalties on an invention or licensing a patent. Developing intellectual property is also a way to create passive income.

Leveraged income includes income from activities that deliver value to a large group of people at the same time. An example might be someone who offers their services through a conference where you are working with many individuals one time. Your earning potential is higher by the sheer volume of individuals in attendance who are usually paying a fee. Adding this option to your model creates another choice for the client to work with you.

Recurring income is income that may entail personal interaction and requires your time and effort but it provides the regular cash flow to you while providing choices to your clients. It may include a monthly retainer or development of a continuity program where an individual receives continuous services or information at regular intervals.

Strategic Cash flow for your small Business

Consider how to apply these strategies to your business. What product can you create that your clients are asking for that will sell over and over? What is the range of services or products you offer that provide choices to your clients to engage with you? How can you create leveraged income by working with others? How could your leveraged activities also generate passive income?

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Small changes now in your business model can create cash flow earlier than you think. Cash flow creates more choices for you and your clients. Think about how to create various revenue streams by redesigning your business model. In a short period of time, you could be engaging more clients, with less effort, on purpose.

Other strategic steps to creating your business cash flow budget and forecast include the following:

Project your collections  

what do you expect to bring in as revenue to your business?  Take into account your terms of collection.  For example, if you have standard terms of net 15 but your client are more typically paying invoices in 30 days or more, then you will need to take that into consideration when projecting your collections. 

What other cash are you expecting to bring into your business? 

 Are you anticipating new deposits for client projects or purchases?  What about proceeds from partnerships, sales of property or other equity-based transactions?

Detail your expenses and other cash outlays

  This is most easily done by taking a look at your expenses from the previous period (month, quarter, year).  Are they fixed expenses or variable?  Make adjustment to your previous outlays, if necessary.  To get you started, it may be simpler to start with your standard expenses first, such as rent, payroll, insurance, loan payments, travel and entertainment, utilities, etc.  Once you review your records and get in the flow of thinking about your cash outlays, you can make smarter decisions on variable expenses such as purchasing new equipment or hiring a marketing consultant.

Take a look at your accounts payable from the previous period 

(again, month, quarter, year).  What are the due dates?  When will you pay those expenses?

If your business is relatively new and you’ve never created a cash flow budget before, keep in mind that it may take a few months to start getting consistent numbers that you can use to create your cash flow budget.  But something is better than nothing and the sooner you start, the better you’ll be able to track your company’s financials, and therefore, your company’s success.

In the beginning, consider reviewing your cash flow projections at the end of each month – perhaps even weekly if your company is relatively new.  Compare how your forecast meets with your actual cash flow and make any necessary adjustments, adding any new invoices, receivables and unanticipated or overlooked expenses that showed up during the month.

Once you feel comfortable with your numbers, considering sharing your cash flow forecast and your other company goals with key members of your team who can help support you in meeting your objectives.  Assign budget responsibilities for certain line items to your management team where appropriate.

It’s the beginning of a new year and there’s no better time to take a close look at your financial systems, make the necessary adjustments and plan for your company’s future.  Your cash flow forecast and other budget-related reports are a great place to start!

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