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6 Tips to Improve Your Business’ Cash Flow

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Mohab Growth Hacks 0

6 Tips to Improve Your Business’ Cash Flow

Effective management of cash flow is crucial for any business. While you may have good turnover and profit, but you may lack liquidity if you do not manage your cash flow in an efficient manner. Cash flow management essentially entails keeping proper record of money coming in and going out. The analysis of this record may let you see the gaps and fill them accordingly. Here are some tips which will let you manage your cash flow easily.

Develop a Plan and Forecast: planning and forecasting involves you looking at your finances and then draw inferences for your future. While the task may seem daunting at first but with the availability of a number of software for cash management, your task may be eased to a certain extent. You can choose to use simple spreadsheet or some sophisticated software specially designed for this purpose, the choice is yours. You will be required to record your opening cash and bank balance and all the inflows and outflows there from. When you start seeing a pattern, you will be able to forecast your future transactions. This exercise will allow you to plan your spending accordingly.

Speed up Your Inflows: businesses need to provide credit line to their customers, which may lead to delay in cash inflow. However, curtailing such terms and conditions may lead to loss of revenue as your customers may shift to another vendor with liberal credit terms. In such cases, it is essential that you reconcile your objectives of achieving higher revenue and improving cash inflow. You may offer incentives for faster payments. Such incentives may or may not be financial in nature. For example, top fast payers may receive advance information about new product arrival. You may also institute late payment fees to discourage lax customers.

Control your Outflows: managing cash inflows is one facet of cash management system. The other side is to manage your cash outflows. The best policy is to talk with your vendors and seek more relaxed terms. You may also use your impeccable payment history to make your case. If you are able to extract a few more days for payment from your vendors, then it may work wonders for your cash flows.  However, never try to take a shortcut or default on any of your payments as it may impair your relationship with your vendors on permanent basis.

Finance your Inventory: liquidity is related to cash which is often tied up in acquiring other assets such as inventory.  Take proper record of your inventory and analyze it. You may find that your funds are unnecessarily tied up in old inventory which is not moving. In such a case, you may want to liquidate the inventory and free up your cash. Further, if you have excess of any asset including tools and raw material then re-sell them to obtain cash. You may have to sell them at deep discount but some money is better than the money tied up.

Use Professional Services: for better management of your cash flow, you may want to engage the services of professionals. This is especially important if your business is growing at a fast pace and the requirement for liquidity is high. You may engage factors for the timely collection of your invoices. Factoring works by providing you cash on the basis of invoices generated by you. It can be excellent way of availing short term finance. You are also not required to take any drastic step with regard to the collection of bills. However, factors charge fee or commission, which may not be affordable to many businesses.

Take Advance Payments: you may introduce new terms to your sales whereby you require the deposit of payment before the delivery is undertaken. This arrangement is especially helpful if you are engaging in a large order. Taking advance will lower your risk of default and will also improve your liquidity. Such advance payment may also be used for funding the transaction so that you do not have to look for alternative financing arrangements.

Cash flow management does not have to be an odious task. With these pointers you may manage your cash flows in an easy manner.

6 years ago
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Mohab Customer Experience 0

How to Improve Customer Retention and What Are the Benefits

Customer retention is highly important for any business as relying solely on new clientele for growth may prove to be a myopic approach. There are several approaches which may be undertaken to ensure that the firm is able to generate repeat business from its set client base. The main benefit of customer retention is that it takes considerably lower expenditure to generate revenue from established customers than from new clients. Higher Revenue: when a business is able to retain its client, it helps in achieving higher revenue as well. As your clients already trust your business practices and products, you are not required to plan any expensive marketing plan. This feature ensures that your profit margin is more robust than ever. Here are some of the benefits of a loyal customer base.

  • Improved Business Image: apart from offering pecuniary benefits, customer retention also helps a firm in generating goodwill in the market. Having a loyal customer base gives a stamp of approval to your products and services. It sends a message to the market and to the prospective clients that your business is trustworthy.
  • Lower Marketing Costs: acquiring new clients is an expensive affair as you need to spend a lot of money on collecting data about them, designing appropriate policies and executing them. However, in the case of existing clients, these expenses are reduced considerably. Lower costs mean that you are either able to provide your goods and services at cheaper rate to your clients or able to add to your profit margin. Both the situations are conducive to solid business growth.
  • Data Collection: in today’s world, data is king as it is used for making analysis and creating policies. When a business has large customer base, they are able to generate big data sets which are required for proper analysis. It is also a lot easier and less expensive to collect data from existing clients than looking for new people for this purpose. In case of loyal customer base, the frequency of collecting data and analysis may also be kept lower, which further helps in rationalizing the associated costs.

Creating customer following need not be a daunting task. Here are some of the main ways you can ensure that your customers keep coming back for more.

  • Know Your Client Base: it is important that you understand the requirements and features of your clients. It will help you in customizing your offerings, motivating clients to keep coming back. Providing customized products to best meet your clients’ requirements is the key to build a loyal customer base.
  • Take Extra Care: for generating repeat business, it is imperative that you provide robust customer care. This step ensures that as and when there is any grievance, it is properly handled. The speedy resolution of the issues is also important as any delay may lead the customers to look for alternatives, eroding your client base.
  • Offer Incentives: it is always helpful to start loyalty program, where you offer incentives to your clients for making repeat purchases. Such incentives may be in the cash form or non-cash form. The monetary incentives may be introduced through discounts and cash backs while the main examples of non monetary incentives are freebies, early access to new products and free shipping among other features. However, it is ideal to offer a judicious mix of cash and non cash incentives to ensure that the requirements of your client base are adequately met.
  • Remain in Touch: it is important that you maintain constant touch with your clients, even when they are not making purchase. This is especially important in the areas where the demand is seasonal. During the lean season, you can remain acquainted with your clients by sending them newsletters about latest developments in your business. However, you should ensure that such communiqué is appropriately customized and is able to pique customers’ interest.

It needs to be noted that offering high quality goods and services is of paramount importance for creating a loyal customer base. However, you also need to undertake the above given strategies to ensure that you are able to generate repeat business from your clients.

6 years ago
PayTabs
Mohab Growth Hacks 0

What is the PCI Data Security Standard and why should I care?

PCI Data Security Standard or PCI DSS are the standards governing credit card industry. The task of administration of these standards is entrusted to the Payment Card Industry Security Standards Council. The main aim of these standards is to create a safe environment for credit card transactions and minimize the risk of financial frauds. While credit card protection is vital for all the users, it is of utmost importance for online businesses. Compliance with PCI DSS can help you secure your business as well as your clients’ sensitive information.

What is PCI DSS?

PCI DSS are internationally applicable and are designed to maintain the integrity of customer data and merchant payment systems. The standard was originally proposed to encourage the credit card companies to take adequate steps to ensure the safety of the data. In order to be PCI DSS compliant, an organization is required to fulfill twelve core requirements which include the obligation to build and maintain a secure network, protect the data pertaining to the cardholders and implement robust access control measures. There are also different levels of compliance, which you may choose to best meet your resources and requirements. Even if you outsource your payment processes, you are still required to be PCI DSS compliant. Similarly, you are required to fulfill PCI DSS requirements even if you do not store credit card data.

How to Become PCI DSS Compliant?

There are several ways to fulfill 12 core requirements for becoming PCI DSS compliant. Some of the steps you can take to ensure that your business complies with the set regulations are given below:

  • Ensure the safe recording of financial information such as credit card numbers, expiry date and CVV. You can simply outsource your requirements to a payment gateway which will then be responsible for the proper upkeep of data.
  • Update software and How security programs on your machines so that the malicious codes may not be installed on them.
  • Educate your employees to take adequate measures to secure the data. All systems should be password protected and such passwords should be frequently changed. Further, the employees should also be directed to not share their passwords and other login details.

There are main four levels of compliance and these levels are defined on the basis of transaction volume. Level 4 is applicable to businesses processing less than 20,000 transactions annually, whereas Level 3 covers the organizations carrying out 20,000 to 1 million transactions annually. Level 2 is applicable where the volume of transactions is between 1 and 6 million in a year and the upper most level is Level 1, which needs to be complied with by the businesses processing over 6 million transactions.

The process to become PCI DSS compliant varies for different organizations, based on their policies and procedures. The standard is applicable to all the businesses which process, transmit or store card details. You can start the process by completing the self-assessment questionnaire and undergoing vulnerability scan with an approved scanning vendor.

Why PCI DSS Compliance is Important?

The main aim of PCI DSS is to make payments processes safe and secure. The standard provides guidelines about the prevention and detection of data loss and payment frauds. It also offers remedial steps to be undertaken in cases where breach has already occurred. The compliance with this standard is important to ensure that the risk of a financial breach is minimized.

An organization can also boost its image and reliability by complying with PCI DSS. In the absence of such compliance, it may lose out on traffic and revenue volume as its clients may choose not to deal with the firm, in order to protect their financial details. The compliance with PCI DSS helps in elevating the trust level, which ultimately leads to a stronger top line.

Apart from gaining clients’ trust, compliance with PCI DSS can ensure the longevity and survival of the business as well. Financial data breaches can have devastating consequences for a business. Such frauds may lead to financial and even criminal liabilities, severely hampering the operations of an organization. Therefore, it is important that the risk of such catastrophic events is curtailed by following PCI DSS norms.

6 years ago
Time for Holiday Retail Marketing Strategies
Mohab Growth Hacks 0

Time for Holiday Retail Marketing Strategies

The busiest time of the year is back for businesses. Holiday season is expected to retain its past momentum and will likely record bumper sales level again. But, are you and your business prepared to use their opportunity in the best possible manner. While it is advisable to hash out your holiday retail marketing strategies well in advance, but it is not too late. Here are some of the pointers which can help you fine tune your holiday retail marketing strategy.

  • Get a Head Start: you can get an advantage over your competition by starting early. Holiday season entails big crowd so you need to be prepared to handle them. If you are running an online business, you need to ensure that your servers are all set to accommodate incoming traffic. If you do not plan early, your website may break down under the pressure of traffic volume. Apart from this, you also need to plan for proper inventory. This is important for both online as well as offline businesses. While it is not advisable to tie up funds in excessive inventory, but running out of good while there is demand for them can cause even bigger loss to your business.
  • Remain on Your Toes: you may plan early and go for perfect execution, but there will always be circumstances which will require you to go back to drawing board. So, it is important that you keep your strategy simple and flexible as you may be required to change it on a moment’s notice. For online businesses, server outage may be a big issue. You should be prepared to handle any such malfunctioning as and when it arises. Further, there may be unexpectedly higher demand for some products. In such cases, your business should be ready to handle such high volume.
  • Know your Market: in order to design effective marketing strategy, it is important to know all the nuances of your market. Even within your target market, you should be aware of different sub-segments and tailor fit your marketing strategies as per their requirements. For example, while designing your holiday marketing strategy, you may want to ensure that you retain your repeat customers while also making sure that you are able to attract the new ones. Overall, your marketing strategy should account for each sub-segment of your target population.
  • Make it Festive: while it is a serious business, the holiday season is about festivity as well. Be sure that you generate that holiday buzz and give celebratory makeover to your business strategy. For this purpose, you can start with marketing material such as pamphlets and emails. It is imperative that your marketing items are able to create that festivity buzz. You can also tease out the customers by providing them a sneak preview of the goods offered and discounts provided. Design your campaign in such a manner that it highlights a timeline leading up to the holidays in a creative and intriguing manner.
  • Go Mobile: as more and more people are now accessing the web through phones or tablets, it is important to ensure that your marketing strategy is customized for mobile experience. Start with your marketing material to ensure that your promotional emails and advertisements are displayed properly on smaller screens of mobile devices. Optimize your website to load faster on even slower mobile connections. Better still, you can simply go for designing a dedicated app for your mobile clients. Whatever you plan to do, but make sure that you pay due attention to people using mobile phones and devices.
  • Pre Test: it is highly important to go for a pre test run, so as to figure out potential glitches. You can try out different approaches to find the best one and then deploy the selected ones to ensure the best results. You can also tweak your other strategies in response to the results of pre test run. It will also give you a chance to test your discount codes to avoid any last minute issues.

Holiday season may prove to be the best marketing season for your business, provide you carry out proactive strategy and prepare yourself beforehand.

6 years ago