By John Meyer
We all know what happens when one assumes, but let’s forgo prior knowledge and assume that your start-up IS NOT philanthropic, and IS a profit-seeking endeavor. Based on that lone assumption, it reasons that you are fixated on revenue streams and are constantly looking for viable ways to expand cash flow.
Some methods are obvious, as others are often overlooked. While the former ideas always merit re-visitation, it is the latter group that should be focused on and exploited. To aid in your ongoing quest to ring the register, here are four ways to keep that money rolling in.
1. Be Mindful of Cost Management
Okay, it’s a foundation concept in Business 101, but cost management is the primary culprit for diminishing returns in any given start-up. Costs of all types need to be monitored, adjusted, and reviewed with regularity. From operational costs (workspace overhead, labor, etc.) to personal costs (insurance, taxes, etc.), there are myriad financial considerations associated with running your start-up. Your balance sheet must be a recorded document, but more importantly, a mental image that you are always looking to refine and streamline. If rent goes up, what costs can be reduced so as not to take from incoming revenue? Cost management is a chess game that profitable start-ups cannot afford to lose.
2. Take Advantage of Tech (and Social Media, Too)
The technology age has given entrepreneurs unprecedented opportunities for product development, marketing, communication, and commerce. Equally important, tech has gifted entrepreneurs with the power of visibility. Social media is a dominant force, and any business not taking full advantage of its potential is sabotaging itself and its future cash flow. If customers can’t “see” your start-up, they can’t patronize your start-up. Follow social media outlets and look for where the action is … do you benefit more from a Facebook page or a Twitter account? Should you offer value-added services on your proprietary website? Only you will know the answers after looking closely at how social media should be utilized to your best advantage.
3. Aim for Fair Price Points
There is no denying that price rules the market, with customer service a close second. Consumers are obsessed with getting the best price on everything they contract for, be it landscaping services or household items. Sometimes start-ups get bogged down in a price war with the competition, and feel obligated to undercut themselves to the point of no return. Look closely at your pricing model, and make sure it is comparable to competitors as well as realistic for your target market. If you sell a quality good/service for a fair price, you will maintain cash flow. If you get caught up in the bargain basement mentality, your revenue will quickly disappear. The hypothetical best price for the customer is not necessarily the best price for your business’ profitability. If you can’t compete at a specific price point, then it is time to regroup and rethink your approach.
4. Know Your Unique Value Proposition
Reinventing the wheel should be left to wheel makers, but your start-up needs to be innovative and forward thinking. What goods/services do you offer, and why are they special? If your offerings do not stand apart from those of the competition, then you have not distinguished yourself as warranting anything more than average customer attention. To generate significant profits, your start-up must give the marketplace something noteworthy, and fill a constant consumer need. Can you give customers something better than they are used to? Can you provide customers with a specialized item that is the best of the available alternatives? If the answers are “yes” then your revenue will grow accordingly, and you will experience measurably profitable returns.