Cash Flow Crash Course Part One: 5 Steps To Increase Your Income
Get ready for a crash course in cash flow management!
Our CEO, Candace, has been in over her head in business debt (to the tune of $400,000 😲), yet she turned that debt around and made her three previous pet businesses SO valuable that she could name her price when selling them.
No matter where you are in your pet business journey, you can learn to manage your cash flow and crush your money goals to get to the next tier of where you want to be.
You’re probably in one of three places right now:
💰You’re in the hole. You’re worried about sales, bills, and when things will hit that checking account. You’re constantly checking your online banking, you’re riddled with anxiety and stress, and you’re desperate to find a way out so that you can start enjoying your business more.
💰You’re breaking even. You have enough to pay the bills, and sometimes there’s a bit extra, but you don’t have a cushion of savings to make you feel completely comfortable.
💰You’re making money. You’re watching the savings start to stack, but now what? You need to know what to do to take your business to the next level.
Whichever stage you’re in, read on!
We’re going to break down the three steps to improving and maintaining the management of your cash flow… but one more thing before we get there.
What is cash flow?
Cash flow is not profitability (although mismanaging your cash flow will directly impact your profitability).
Cash flow is simply the strategic monitoring of money coming in and money going out. It makes the difference between just keeping your pet business open and thriving.
There are three main steps to fixing your cash flow problems:
- Increase your income.
- Decrease your expenses.
- Manage your money.
If these feel obvious to you, it’s because they are! But there’s much more to them than just listing them out for you to read; they are all easier said than done.
Today, we’re focusing on step #1– Increasing your income. Here are five steps to increasing your income in your pet business:
1. Raise your prices.
This is the easiest thing you can do! Even minor tweaks can pack a major increase to your business overall.
If you sell products, this is your initial markup, or if you have a product or service, think about adding an extra dollar to $10 per service. Increasing prices requires no further sales training, additional marketing, and NO need to bring in more customers. It’s all about your current customer base spending just a little bit more, which adds up throughout the whole year.
2. Maximize your space.
Space is money, and when space isn’t being utilized, it’s not earning you any! Groomers and bathers– make sure tubs and tables are filled. Daycares– know your max capacity and work toward filling up slow days with fun promotions or incentives. Boarding facilities– Know how many kennels you should always have filled, and consider offering a discount on slower nights. Retailers– calculate your sales per square foot and vendors per square foot. Are you assigning your best sellers enough space?
3. Pay attention to money tied up in inventory and team.
Truly understanding the flow of your merchandise is critical for anyone who carries inventory. If you’re sitting on things that you’ve ordered six months, nine months, or more than a year ago, you need to put those on sale and free up that cash to reinvest in things that are actually going to turn for you.
The same idea can be applied to staffing! Are you overpaying for unnecessary staff? Can you tweak the schedule to reduce hours and save money?
Pay close attention to the areas of your business that might be sucking your money vs. earning you money!
4. Don’t over-purchase just for the discount.
Whether this is a vendor offering you a bulk discount or a big sale on cleaning supplies… do you really need a year’s supply of anything?! Resist the urge to over-purchase because there’s a shiny discounted bulk price tag.
5. Increase your average sale.
The average sale is a great measurement to track and improve because everyone in your business is getting the same quality of consumer to sell to.
To increase your average sale, let’s keep it simple. You and your team can add just one more item to every single sale or one more mini-service that could get bundled in or get people to book their next service immediately. What is just one more thing that your customer can purchase or do? Once you’ve identified that for them, then offer it to them. You can find more examples of how to increase your average sale in lesson #2 of the Pet Boss Summer School Series here!
Want more specific tips for increasing your income to manage your cash flow? Check out episode 16 of the Boss Your Business podcast! And check back next week for part TWO of this Cash Flow series!
Learn more with us!
- Need 1:1 support to make massive action now? Book a discovery call with us to see if working 1:1 with Candace is the right fit for you.
- Get on the waitlist! You’re passionate about pets. It’s time to have a business that supports the life you want, too! Learn the specific techniques to find new customers, to increase sales and to build a better team for ANY kind of pet business by joining the Pet Boss Club! Get on the waitlist here.