The basic principle of cashflow management is that you have a daily record of business spend and cash flow or sales volume. This is a basic principle that all traders must adhere to. By recording the inflows and outflows of your business, you will always know how much money you have.
When you are used to seeing money coming in and out, you will be excited to make sure that the amount of money in your business bank account is constantly increasing. And, this you won’t be able to see clearly if you do not properly record our in and out cash flow.
In addition, recording business outflows will make you less likely to take business money and use it for personal purposes, or take away records because it will disrupt your business outflow. You are not sure where you spend your money, for what and how much.
We want to share with you the 4 principles held by these 4 well-known brands in managing cashflow. Read on to find out how they can ensure more inflows, and less cash flows.
1) Strengthen existing markets, add new markets
When Coca-Cola rolls out new products or enhances existing products, or improves ‘packaging’ of current products, they don’t do it for fun. It’s all about increasing your business income or increasing sales. With a new image added to the product packaging, or a new addition to the existing product, with the right marketing activity, it will increase sales volume.
Coke is also very good at identifying which products give a higher return or sales, and they will focus more on the well-known ‘Carbonated drink’ product. At the same time, they are also expanding the market by introducing non-carbonated drinks based on milk, ice cream and mineral water.
This is because, they understand the level of health awareness, so they back up their business by trying to dominate the market by offering ‘non-carbonated drinks’ products. They do this because they want to make sure they dominate the market and increase cashflow.
2) Speed up the payment process
Our people, when they love business, are very much in debt. It is said to want to build a good relationship with the customer. Especially if we have customers who have been dealing with us for a long time. Not a mistake, but keep in mind, the power of a business is its cashflow, if a business does not regularly accept the flow of cash, the business will suffer.
One of the ways to ease the flow of cash is to simplify the payment method and help customers speed up the payment process. Therefore, prepayments using coupons and vouchers are optional because, on the vouchers and coupons, they actually contain prepaid value. Now, online payments, using internet banking, ATM cards and mobile phones have become an option.
However, Amazon.com has taken a faster leap in that they have just introduced Amazon Go, a convenience store that doesn’t require its customers to line up to make payments. Customers only need to top-up the value in their Amazon Account, and they can take anything from the Amazon Go convenience store, and the value will be deducted from the Amazon account according to the amount they are due. Indirectly they are actually accelerating the flow of money in their business.
3) Expand and Strengthen the ‘Tribe’
One of the ways to increase your cash flow to make your cashflow stronger is to build followers or tribes that will ‘die’ to your brand. Unless there is a new product, they will be among the first to buy it.
This is especially important for durable products and this is the method used by Levi’s Strauss. You know, Levi’s brand jeans are extremely durable and can last up to 10 years. It’s hard to find food if people only buy jeans once every 10 years.
To keep cashflow in check, they are always releasing new products, but because their products are sustainable over the long term, they are launching a concept marketing campaign – building Tribe or strong followers. This marketing concept has been adopted by them all over the world, and it has proven to be effective as their revenue is constantly increasing and it proves their strong followers will get anything new from Levi’s.
They also released an ad concept that uses the concept called ‘Circle’ as a way to attract their followers to remain Levi’s users.
4) Reduce Cost by Increasing Efficiency
This is what happened to FedEx. The problems of the international economy led to rising shipping costs, but they could not charge their customers high fees. What they do is that they reduce the number of international flights and increase the efficiency with which every available flight needs to be at maximum capacity. Thus, they have successfully reduced the cost of sending mail through the air service.
FedEx also improves staff efficiency and reduces repetitive work processes as it can take time and inadvertently increase costs. For example, repeated inspection processes have been shortened, thus the delivery process will be faster and the cost of staff work longer and the cost of flights may be reduced.
So, if you have a record of expenses for constantly spending, or unexpected expenses you will see where you can reduce and make them more efficiently.