Increase Cash In
Current Take: COVID-19
Revenues from sales were seriously affected for most businesses due to the COVID-19 crisis. While many businesses were forced to temporarily cease operations, others were able to pivot, assess the landscape and find routes to revenue generation. Some used the time to strategize for how they would adapt to a new reality and reviewed their processes to identify and close gaps.
Generating cash from operations — your sales revenue — is key. Try tracking your inflows with the Business Cash Flow Tool to get a clearer picture of your revenues. Either increasing the volume you sell or your average price could have a positive impact; increasing both could grow revenues. How can you make this happen?
Understand the competition
Evaluate providers of products or services similar to yours:
- How does your price compare to theirs?
- How do your features and benefits — your value proposition — compare to theirs?
Segment your customers
Your customers can be segmented according to their specific needs and behaviors. This will enable you to:
- Tailor your communications for greater impact.
- Reward loyalty to ensure continued patronage and a dependable cash flow.
- Identify potential new audiences with similar preferences and spending habits.
Adjust your pricing
Even a minor price increase can have a big impact on your revenue over time. You can lessen the impact on your customers if you:
- Bundle items together to mitigate individual price changes.
- Offer discounts for volume orders.
- Provide favorable payment terms for longer commitments.
Collect the cash generated by sales
Make sure you understand the processes in place to collect the cash generated by sales. It’s important to keep an eye on receivables to make sure they don’t grow stale.
- Understand the requirements for getting paid by customers.
- Have a system in place to trigger a notification if payment isn’t received by a certain time.
- Consider accepting credit card payments and other methods of receiving payment such as ACH and wire.
Focus your efforts, time and money on levers that can improve the cash going into your business. Which one is the easiest for you to modify now? The tools in the next module will help you analyze where to start.
For Informational/Educational Purposes Only: The author’s views may differ from other employees and departments of JPMorgan Chase & Co. Views and strategies described may not be appropriate for everyone, and are not intended as specific advice/recommendation for any individual. You should carefully consider your needs and objectives before making any decisions, and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results.