So, this popped up in our Inner Circle Group the other day.
“I’m tired of waking up anxious thinking of my financial situation. Makes me feel like I must be doing something wrong.”
I know that feeling. And I also know it was probably hard to write that post.
Even though your sales are growing, you never have as much cash as you need, or as much cash as you think you should have.
So I reached out to Chantal (our lovely member) and told her I could help.
Because, even though cash flow stress is very common for us e-commerce people, very few people talk about it, and even fewer provide solutions.
I know how to fix this, because I’ve done it.
Stay with me, and I’ll share 5 strategies that you can use to stop cash flow stress for good.
But let’s start with why it happens. It’s simple, really.
We sell products, and we have to invest in the inventory before we make a sale. In many cases, we have to invest months before we make a sale.
I was talking to one of my Reliable Revenue Members yesterday, and I’ll use her situation as a perfect example.
Let’s assume inventory cost is 40%.
- In January 2020, her sales were $6K (inventory cost would be $2,400)
- This year, her January sales are $40K (inventory cost is $16,000)
And let’s say you need 90 days between when you buy the inventory and when you sell it.
So last year, her inventory investment to support her sales was $7,200.
And this year, her inventory investment to support her growing sales is $48,000.
And if she didn’t put in a plan to create the cash in her business to pay for that growth, she would have huge cash flow stress. The good news is that she does have a plan!
Click to watch as we walk through the strategies you can use to get more cash in your business fast. Or read on.
Here’s the short list of strategies. (more details in the video)
1.Narrow your product selection. Focus on the top 50% of your inventory. Create a Plan to retire the items that are the bottom 50% of your selection. When you do that, you’ll have more free cash to invest in the items you are actually selling.
2. Review your list of top sellers, and raise the price. Raising the price of the items you are selling most will have more impact on your cash flow than raising prices on your slower selling items. (Remember, “you should retire” slow selling items)
3. Get ahead of the selling cycle. When you place a large order for inventory, make it part of your marketing plan to create excitement and anticipation. Inner Circle Members can use the Launch Plan training in Marketing Momentum Module to do this. Create a plan to sell 50% of your order in the first 30-45 days of receipt.
4. Add a Digital product to your mix. (watch the video for ideas)
5. Add in some recurring revenue. Monthly subscriptions will even out your cash flow, help finance your growth, and build high value customers that will keep coming back.
I highly recommend you start with #1 and #2, and then move into #3.
When you do this, you’re simply rearranging what you already have to create more cash in your business.
If you have questions, comment below and ask me!
So, here’s what I need you to do next.
First, sign up to get updates in your inbox:
Then, be sure to Like and Follow my page on Facebook. I’ll be posting regular updates there!
That’s it! It will be a fun adventure, all the way from 0 to $50K on Shopify!
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