How to Increase Your Cash Flow
This column first appeared on RIMOFTHEWORLD.net on December 14, 2009 and in the Business Press on January 7, 2010.
Although I’m not an economist, based on the checkout lines this week at Target, I would surmise that consumer confidence is on the rise. My first clue should have been the parking lot. I drove around aimlessly for hours, finally settling on the only empty spot I could find…in Texas. After I hiked in, the chaos at the front door reminded me of the mob scene in the cult classic, Soylent Green.
The checkout line snaked all the way back to the frozen food section. Now, if you’re not a Target shopper, this may not mean much to you. But suffice to say it was not unlike a gas station circa 1970. The good news is that some people appeared to be bonding in line. One young couple who met near the dog food aisle got engaged and married by the time they reached the checkout.
Now, ordinarily, any reasonable, rational person would take one look at the crowds and walk right back out the door. But this is the holiday season. So sanity is in short supply. For my part, I was willing to brave the crowds because, in so doing, I would save $4.75 on a Christmas gift for my husband. As I said, sanity is in short supply.
I share this with you because we, as Inland Empire business owners, should pay careful attention to economic indicators like overflowing parking lots and long lines at discount stores. While there is no telling how remorseful shoppers will be once their credit card bills arrive in January, for now, people are willing to throw caution to the wind. So I say, Carpe Diem!
But how can you seize the day if your company doesn’t offer inexpensive trinkets that are easily wrapped and placed under Christmas trees? It all boils down to a lesson you probably learned in high school economics…supply and demand. Figure out how you can reasonably supply what is in demand, without rewriting your entire business plan and altering your mission statement. Then, focus all of your advertising efforts on that item or service.
Now, granted, this will require some creative thinking. But if you can come up with a strategy to get people in the door in a down economy, you can improve cash flow, which may just keep you afloat until your primary product line is back in fashion.
The following are ideas for demand-side marketing at every price point:
For Free—until we moved to the San Bernardino Mountains, I was unaware that mistletoe is a parasite capable of taking out a mighty oak. I’m embarrassed by the numerous occasions I purchased small plastic baggies filled with the fungus, which was dressed up with red ribbon and peddled by enterprising tykes stationed outside grocery stores at Christmastime. When all else fails, take a lesson from their strategy. Find something you can get for free and sell it. You might be surprised at how many people might be willing to pay. (I’ve got several trees filled with mistletoe if anyone wants to explore that trade.)
On a Budget— add and promote a secondary product line. Pam of PJ Studio cuts and colors hair and recently decided to branch out by creating beautiful winter scenes on tin stars which she sells during the holidays. Granted, the line between high-lighting and tole-painting may seem faint. But Pam did well to focus on products that share an overlapping target market. Her hair-styling clients are a captive audience who admire and purchase her artwork, which translates to improved cash flow.
The Sky’s the Limit—if you’ve ever had a hankering to diversify, now is the time for happy accidents. Consider Atlanta pharmacist John Pemberton who was trying to expand his customer base by coming up with a cure for headaches. Although he failed in his attempts, in the process, he stumbled on the recipe for Coca-Cola. Since, ironically, Coke is now widely believed to cause headaches, Pemberton’s efforts have come full circle.
Thankfully, today, both Coke and Excedrin Migraine are available for purchase at Target. Until next week, I’ll be Bowling for Business.