2020 was a year like no other for many SME owners. But the start of a new year is a great time to reflect on what has worked and what hasn’t, also to streamline processes for operational efficiencies and to think about customer service and cash flow optimisation.
One area that is worth review is the customer experience that your business provides. According to Inside Small Business, returning customers usually buy more over time, with customers likely to spend more in 24 to 30 months than they are in the first six months. The Entrepreneur Handbook mentions that it costs six times more to acquire a new customer than it costs to get more business from an existing customer. For example, one of the easiest ways businesses can enhance the customer experience is by providing a seamless payment system.
Make it easy for businesses who owe you money to pay off their debt. Many businesses only offer outdated and inefficient payment options. Don’t be afraid to review and consider alternative methods to improve your cash flow. For example, consider offering early payment discounts to clients, or make sure that you send your invoices immediately and that they are clear and easy to understand. Another example is invoice factoring which is a cash flow solution that allows businesses to access a large percentage of the funds held in their unpaid sales invoices, in the form of a cash advance. This can provide reliable cash flow to keep your business running and growing.
By implementing the right tools and processes, business owners could look forward to a busy and prosperous new year.
(Source: Inside Small Business January 2021; Nova Cash Flow Finance 2021)