Hi I have recently been experiencing a reduced cash flow in my business and personal life and it bought home the importance of cash flow in our lives.
There is an old saying “Cash isn’t the most important thing in life but it is a close second”
When you experience a cash flow crisis it certainly brings this message home.
So I decided to write this month about the importance of always paying your self first.
I was introduced many years ago to the great book “The richest man in Babylon” by Colin Carlson. A simple story about the timeless principles of money.
Colin talks about paying your self first. No matter what income comes in to your life you take 10% and put it away as a saving.
Only then commence paying all your outstanding bills based on the remaining 90% income.
So what does this do for you? ….It gives you 2 advantages.
Both of these advantages come with a comfortable feeling of security for you also.
This same principle can be applied to business . Warren Buffett is reported as always having a billion in cash to take advantage of any business opportunities that may come along.
He builds business based on a company with a durable competitive advantage.
This means a constant cash flow as the product or service is wanted over and over again by the consumer market.
Let me ask you a question, How can you build a durable competitive advantage in your business?
Obviously if the product is unique you may have an advantage, but the market place
needs to hear about it.
So your advantage can be developed with an aggressive marketing campaign.
However even if your business is built around a product or service that is in a very competitive market.
I believe you can still increase your competitive advantage with “second to none service and support” with your customers.
If your customer trusts you and your product to give the relief and satisfaction they are looking for. Then they will come again and tell their friends.
So give exceptional service. care for your customers needs and attend to their issues with compassion and concern and they will notice the difference in your service or product over the competition.
Getting testimonials and posting these on your web site in my opinion is the most critical thing to secure business in this new word of mouth market place as a result of the internet ,face book, Google + etc.
More and more people are willing to post a testimonial on the internet now than ever before.
So how does this link to cash flow.
Humans are the only animal on earth that values cash and keeping them happy is a simple process of caring for the customer and they will bring the cash in the door.
This is a timeless principle of business that in many cases I have experienced business owners who seem to have forgotten how important this is.
Take care of the customer and take care of the cash flow.
Pay your self first and build a cash reserve for slower times.
Wishing you all the very best in your business and personal life.