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Prevent Cash Flow Issues by Marketing Business More Effectively

 

Established businesses can find that their market moves away from them in an almost imperceptual manner. Often the first real inkling that something is wrong, is when unforeseen difficulties occur in meeting the payment terms of creditors.

Market Analysis

Businesses can get complacent, and at times even arrogant, towards their market and older businesses in particular will often assign the blame for gradually declining business sales and declining profits, to third parties such as;

  • National Governments and their current policies in various areas,
  • State Governments and the red tape they tie businesses up with on a daily basis,
  • Local Governments for high property rates and high service charges for businesses,
  • Employees and potential employees, and
  • Environment factors outside of their control.

What is generally lacking in such businesses, is any real and recent market analysis, to determine whether the market served by the business, is still a viable one for its established offerings.

The output from a sound market analysis will determine whether the business requires;

  • more effective marketing of its existing offerings,
  • significant changes to the offerings it is making to the market, or
  • a new market elsewhere for its current offerings.

Changes to Overall Business Strategy

Once the true situation has been ascertained, and the correct course of action determined, the overall business strategy needs to be changed to reflect the course of action which must be taken to protect the future of the business.

Whilst the key area to be addressed will be the marketing component of the business strategy, the nature of the changes that will be required to be implemented throughout the business, will usually necessitate a complete review of the entire business strategy.

Potential Shifts Required to Increase Sales and Improve Cash Flow

In order to increase sales and improve the cash flow position of the business, attention will need to be paid to;

  • building awareness capabilities to effectively assess trends in sales revenue and the ratio between traffic and sales made,
  • building the capability to critically review all assumptions underlying the marketing strategy,
  • fine tuning the business antennae, so that demographic changes in the markets served are picked up early enough, to allow effective measures to be implemented to mitigate the direct effects of such changes,
  • increasing business networking activities to ensure business intelligence is picked up and acted upon in a timely fashion,
  • embracing the “new” social media as both a means of communication and a measure of where the business sits in the top of mind awareness of its target market,
  • refreshing all marketing materials, product displays, product and services mixes and, if appropriate, key personnel, and
  • consideration of engaging a fresh pair of eyes from outside of the business to provide an overdue reality check as to what may really be necessary to achieve desired outcomes.

The Desired Outcomes

Any business that discovers unexpected cash flow problems at an inopportune time, will want to quickly establish the reasons, and implement action to immediately rectify the problems.

Good cash flow will result from providing the right product or service, at the right price, to the right market, at the time the market demand for the product or service is at its highest, whilst controlling all of the costs involved in providing the relevant products or services to the market.

Effective Business Marketing Requires Regular Renewal of Business Strategy

To avoid unexpected cash flow issues, established businesses should regularly update their marketing strategy especially in respect to older product or service offerings.

This strategy update should include a sound market analysis, a review of all assumptions underlying current marketing activities, renewing and refreshing all aspects of the marketing mix, and where appropriate, the engagement of a set of fresh eyes to look at the business from a different perspective.

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