One of the biggest issues for small businesses is consistent cash flow.
It’s safe to assume that most small businesses don’t have tons of cash lying around for rainy days.
That’s obviously a great goal to have, but in the meantime it’s important to figure out consistent cash flow. Any entrepreneur or business manager knows that without cash, you can’t operate.
Even if you have a check in the mail from a client, your employees aren’t going to take IOUs while waiting for that check to come.
Here are a few tips for creating more stable and steady income for a small business.
1. Create Maintenance Packages
Many businesses sell products and services that are kind of like packages. The client or customer buys something once. Then it’s kind of a question mark for when the customer will come back. It’s up to the business to find a constant stream of new customers.
And obviously new customers are critical for any business, but for companies with one-time purchase clients it’s even more important.
One thing you can offer in this situation is a maintenance package. Say that you create websites for businesses. That’s a one-time purchase in most cases. You could also offer a maintenance package for your customers where you offer updates, hosting and more for a monthly fee. Or even an annual fee.
It’s additional revenue while also providing a little baseline of income every month.
2. Offer Payment Plans
Payment plans are often things customers look for from many businesses. It can help the customer afford something large and brings new customer opportunities to the business. Payment plans can also offer a steadier stream of income for the business.
You can get into finance charges and things like that, but you could just break down your lump sum payments into more payments to spread things out.
3. Create Add-On Recurring Services
This is similar to the maintenance package, but for this one you’re just looking for other services that are more recurring. For that web design company, for example, they could offer email marketing services. Maybe weekly or monthly newsletters. It’s an add-on that is also something you can bill for monthly, quarterly or annually.
4. Buy Another Business With Recurring Services
If you’re struggling to think of recurring services or if there are obstacles to offering something new because it will take awhile to build then look around for a business that you might be able to purchase.
Maybe you have an auto shop where you do mechanic work on cars. Sometimes business is busy. Other times it’s slow. People usually only need to fix their cars once in awhile.
But maybe there is a convenience store across the street or close by. Inquire about buying it. Everything is usually for sale and you might be able to get a pretty good deal. People need gas often. They need to wash their cars often. They need to buy coffee and snacks often.
It’s a steadier stream of income to offset what you’re doing with the auto shop.
Or say you’re an upscale restaurant. You have high-end customers. They come in maybe once a month. You could offer a catering service with meal delivery for those high-end customers. After all, they’re busy and might not have time to prepare all of their meals. They might be interested in 3-4 meals prepared fresh and delivered…for a nice monthly, quarterly or annual fee.
The key takeaway here is to start thinking about ways to spread out the money you’re bringing in. The more you do that the safer your business generally is from cash flow issues. You’re not as reliant on finding new customers all the time. You can recognize short-term issues faster and still survive while you fix them. So start looking for that stable income for your business. Hopefully these ideas have sparked some thoughts for you…