Sunday morning is your favourite time of the week. Every Sunday you go down to your local coffee shop for breakfast and to read the paper. However, just as you are heading out the door the phone rings. You answer it.
“Hi, I have just called to inform you that if you come down to Generous Joe’s shop within the next 30 minutes you could win $100. To win $100 all you have to do is roll the dice and roll a six. Are you interested?”
What is response? Are you willing to give up breakfast to drive 30 minutes for the possibility of winning $100? My guess is that a few people would make the trip but most would continue with their breakfast plans.
However, before you get out the door the phone rings again.
“Come quick! One of your staff members says he is going to hand out $20 notes to the next five customers who come into the shop!”
What is your response now? You go straight to Generous Joe’s shop to try and win the $100. Of course you don’t. You would go straight to your shop to save your money.
You may think this scenario is a little absurd. However, this happens all the time in small business. A business will spend all their time chasing sales, while money is being given away from other areas of the business. They are on what I call the small business carousel: forever moving forward but never actually getting anywhere with many ups and downs.
A business will have an excellent product or service but they don’t have the right strategies to hold onto the cash as it comes into the business. Many times the business owner does not even know why they are losing money and will continue to chase more sales to make more money.
Please don’t misunderstand me. I am not against trying to increase sales. Marketing is extremely important and should be in everything you do in business. However, marketing with poor financial control is futile. It is like chasing the wind.
This post was taken directly from my ebook called “Stop Chasing the Wind: 5 Steps to Transform Your Business. You can download here“Tags: Cash Flow