Every business owner experiences that time when you just need cash. Maybe your taxes just went through. Maybe you had been banking on a deal that fell through. Maybe an unexpected major expense came up. Whatever the reason, being in a cash crunch happens at some point to just about everyone. It’s not a sign of failure. It’s life. And while we don’t like it, the good news is, they usually don’t come around that often. It’s a time to take a deep breath, and come up with a short term conversion strategy.
Long Term vs Short term sales strategy
In this article, I’m going to share short term sales strategies. Meaning, things you can do to throw together a quick increase in sales. HOWEVER, these do not work as a long term game plan. In fact, they would be detrimental to use all the time as they can cut into your profit margins and future sales opportunities. Your long term sales strategy should be much more defined and planned out. But if you need cash in the next 30 days, consider trying some of these effective sales accelerators.
- Shorten the lag time: There are active and inactive parts of the sales cycle. Active is when you are in conversation and moving the deal closer to the close. Inactive is the waiting a week for the potential client to mull it over. If you rush the active phase of the sales cycle, your client will not have the information needed to see your product as a fit to their needs and you’ll lose the deal. But you can often speed up the inactive time. When I am shortening the lag time it looks something like this:
Client: It all looks good. I’d like a little time to crunch numbers and see if it will work for us.
Me: That sounds great. Why don’t we do this… Can you look over the numbers tomorrow and then we’ll jump on a call the following day?
You have to use this strategy cautiously! If you push a slow mover to make a fast decision, they will always decide no! So you need to be aware of the individual’s needs, and give them an appropriate amount of lag time. For example, someone who needs to crunch numbers in reality needs probably one day. What they really need to do is pull some reports and look over their budgets. They don’t need a week to accomplish that. So this is a situation where you can shorten the lag time.
- Offer a paid in full discount: If your business offers payment plans or monthly service fees, this strategy can bring an influx in cash into your business. You offer a substantial discount if the client decides to pay for their program in full. This incentivises the client to finance the purchase through their credit because the amount of interest they will pay is less than your discount. It ends up being good for the client, and they love this option. Use it with caution! Make sure you are aware of your hard costs for fulfilling on any services and save that portion!
- Sell to your existing clients: Your existing clients already know, like and trust you. Do a promotion where they can purchase gift certificates from you. Or create a limited time upsell offer. This is a great way to create that increase because you don’t have to take the time to build rapport with these people. You already have those relationships in place and they are easier to get on the phone. However, if you “Fish in your pond” without restocking too often, you’ll find that your pond runs dry. In your long term sales strategy you want to be marketing to always add new fish to your pond. That way you can sustain sales over the long haul without your clients getting annoyed with your constant offers.
- Find one or two high paying clients: The temptation when you need cash is to go into discount mode. Because you are in a moment of scarcity you want to offer everything for less thinking it will create movement. It usually don’t solve the problem because you have to sell a high volume of cheap in order to create the cash you need to get you out of the crunch. Instead sell your most expensive product or service. This is the fastest, simplest way to bring cash in. This is also the only strategy I am writing about in this post that I approve using as an ongoing strategy in your business.
- Pick up a gig: This is the strategy I use only when I really have to! Picking up a gig means taking on work that is not a part of my normal services offered. It could be the same type of work you normally do, but you are going to do it for a different type of client. It could be work you are very capable of doing, but that you don’t regularly offer because you don’t love it. It could be a contracting job where the client will have more control over your schedule. These types of gigs have the potential to bring in cash, and let me be clear. I would take on a gig any day of the week if it is what is best for the company. BUT, I have to really think it through. If I am doing work that is outside of my regular flow, it will take me more time and energy. That diverts my time and energy away from my core business. And if I’m in a cash crunch, my core business needs my time and energy. So I really think this one through before I take on any side projects or gigs.
Sell your way out of any cash crunch and then fix the problem
When I started my business I had a “Sales Solves Everything” mindset. If I could just sell more, everything would be fine. But then I experienced a year where I had sold more, but made less. And then I experienced a year where I sold less, but made more. And I learned that sales doesn’t solve everything. So the next time you find your business needing sales now, go sell. It will pull you out of the cash crunch. Just make sure you follow that up with a deep look at what caused the cash crunch in the first place and use it as a great opportunity to solve some bigger problems.