Healthy Cash Flow in the Fasting Season

By webadmin on 10:37 am May 30, 2012
Category Archive

Coach Cynthia

Fasting season is coming near. It’s almost time to roll up your sleeves. In about one month from now, businesses will usually slow down. Unfortunately, your rent, your utilities, your staff salaries, and your other expenses do not slow down with it. At this rate, business owners need to be wise on cash flow and profitability. 

During fasting month, normally there are a lot more things we need to buy yet at the same time our customers may still be taking their time to pay us back. This article attempts to discuss cash flow and how businesses generate healthier cash flow.

As we know, the major three things that affect cash flow in a business are: Account Receivables, Account Payables, and Inventory. What are the strategies that you can start implementing in preparation for the upcoming fasting season?

    •    Redefine your customers. Grade customers into A, B, C, and D.  Not everyone is the same. There are those who pay well, buy a lot, and are very profitable. And those who want huge discounts, buy a medium amount, but delay payment. Since each customer treats your business differently, doesn’t it make sense that you also treat them differently? Classify your customers and determine the service level that you are prepared to give at each level. If you focus on servicing A and B level customers, then your cash flow is on its way to good health.

    •    Reanalyze your product selection. Selling more is not necessarily wise. Selling profitably always is. Take this time to analyze your fast-moving, high-profit products and sum up their total contribution to your business. We find that 80 percent of your profits usually come from 20 percent of your products. The 80-20 rule is right. In this fasting season, focus your efforts on the high-profit, fast-moving goods. 

    •    Reassess your suppliers. I meet lots of business owners who have customers owing them for 90 days, but pay cash to their suppliers. Try to negotiate with them. I understand there are suppliers with such great demand that they are not willing to negotiate, but out of all your suppliers, there must be some who will bend. Remember, the little things make a difference.

    •    Power up your marketing. Yes, the number of prospects may be lower. But how can your conversion rate be higher to get the same or even more customers buying. How can you dig wallet share instead of getting more market share? How can you measure your marketing so that you’re not wasting money needlessly? 

The myth of fasting month does not have to be true for you this year. Put in the effort of getting to know your business in greater detail and I assure you, the results will improve significantly. 

Coach Cynthia owns an ActionCOACH Business Coaching franchise that guides businesses to select & implement effective and cost-efficient marketing strategies to increase your business results with a proven 17-week guarantee. For a free business health check, go to