The Five Ultimate Ways to Generate Cash
There are only five ways to generate cash in a business. I have taught tens of thousands of people around the world, and so far no one has been able to challenge me on this. No one has yet been able to discover any other ways of generating cash.
However, before we get into that, I need to cover some important information that is essential in totally comprehending the five ultimate ways to generate cash in a business.
The Nexus Point: Your Foundation to Great Profits
The only time a business makes money is when it is engaged in the nexus point. The nexus point is when your business – you or your agent, your website, your salesperson or your advertising – meets a client or customer. While accounting, paperwork, team meetings and other business activities are essential, none of these endeavours creates a nexus point opportunity, which is the opportunity to make money.
There are only two areas that create a nexus point: sales and marketing. Only sales and marketing produce customers, and customers are your only source of income.
Many people think that marketing is about getting customers to the door. Marketing, of course, is much more than getting them to your door. It’s also about keeping them. It’s about knowing how to apply direct response marketing to your business to generate immediate cash profits.
Direct response marketing is the ability to launch scientifically tested and measured strategies that create cash in your pocket in 60 days or less. Keep the nexus point in mind when you read the five ultimate ways to generate cash. You will see how it relates to many of the areas.
Your Five Cash Generation Strategies
These are the only ways you can make money in a business. Let’s talk about how to actually make a business profitable.
Here are five effective ways to increase cash flow in your business:
1. Cut Down on Expenses
Most businesses wait until tough times before they reduce their expenses or overhead, but it is better to do it when things are going well. If you can eliminate what is unnecessary, then you can maximise profitability.
How can you cut down on expenses? Make a list of all your unnecessary overheads and expenses. Remember, most business owners only do this when things get tight. The best time to do it is before things get tight. Trim the fat, but obviously, keep your necessary expenses.
2. Increase the Number of Clients
Boosting your client base is definitely an area where the nexus point is crucial. Make a list of how you can increase your clients. Brainstorm this with your associates.
3. Increase Your Transaction Price
For example, if you’re a hairdresser and you charge $45 for a haircut, and you raise it to $55, you have increased the purchase price. Is it possible to increase your transaction price on any of your products or services? If so, make a list.
4. Increase the Number of Purchases
Increasing the number of purchases from the customers or clients you already have is a philosophy called maximisation. How do you maximise a client? You raise the number of purchases or the frequency of purchases from the customers you already have. Again, this is another area where it is essential to use nexus point thinking.
This principle of maximisation can be a profit revolution for many businesses. This may sound elementary to you, but let’s just take an example. Let’s say that you have 100 loyal clients, and they purchase from you twice a year.
What would happen to your business if you could get them to buy from you one more time per year – or, instead of twice a year, three times a year? Your business could go through the roof! Think of the amount of profit you could generate by providing a way where they could purchase from you more often.
Does that make sense to you? This is powerful, yet extremely simple. Write down how you could maximise your clients. Remember, it is easier and less costly to work with your current clients than to go out and get new clients. Burn these three things into your mind:
- Up Sell – Up selling is getting existing clients to purchase more expensive products or services.
- Cross Sell – Cross selling is encouraging clients to buy other products or services.
- Repeat Purchases – Repeat purchasing is increasing the amounts of times clients buy their staple product or service. Brainstorm to make a list of how you can accomplish this.
5. Make Your Business a Saleable Asset
To have a cash generating business, you need to develop a business that’s a saleable asset. For some businesses, this is not possible. There are some businesses, that, if the owner moves on, there is nothing to sell, because all the expertise is with the owner. Is it possible to set up your business to sell it in the future? If so, make a plan and write down what you need to do to accomplish this.
I hope you can utilise this information to create more success and have the lifestyle you truly want.
If you missed my last post, be sure to read, “The Ultimate Key to Making Money in Business.”