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If Cash Is King, Cashflow Is The Castle
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by Michel
Fortin
Very often, I am confronted with a dilemma. One was surely an event
that took place last week. During midterm exams at the college, in one of
my marketing management classes, I caught a student cheating. This person
had copies of class notes tucked underneath his chair, which he discreetly
read from time to time, particularly when I was not looking his way.
When I caught wind of this, I silently walked over to his table,
grabbed the incriminating evidence and, without a word, walked away. (I
later confronted him about the incident in private.) Now, we're told as
teachers to never take this kind of unethical activity personally. But I
couldn't help. I love my students and take their welfare very seriously --
and personally.
I offered a scenario to this gentleman: "If you had to undergo
life-threatening, open heart surgery, would it matter if your doctor
cheated his way through medical school?" (Incidentally, a recent Internet
cartoon jokingly referred to the same matter. A surgeon was about to
operate on a patient when he said, "Nurse, please visit 'surgery.com' to
find out what we must do next!")
Seriously though, the correlation between cheating and Internet
marketing is surely that of spam. In reality, spamming is to cheat one's
business out of much more in the long run. For example, I often -- and
often passionately -- teach about the negative effects of spam.
Unquestionably, spam is profitable in the short term. But like so many
other marketers on the Internet these days, spammers think about cash
instead of *cashflow*.
Big difference.
Spam will generate sales -- a shrinking minority of people will
respond favorably to spam giving a short, temporary boost to any online
business. However, like a drug the effect usually never lasts and the need
to keep spamming will emerge sooner or later. And similarly, the hangover
can often be deadly -- with ISPs deactivating, flames abounding and
authorities looming.
Spam is not the only culprit. Many have instituted moneymaking
processes on their websites that typically generate either very small
quantities of cash or very large quantities in very short periods of time.
By far, it is a better approach to institute a process in which continuous
streams of cash keep flowing.
Similarly, if your promotional efforts have been to simply generate
sales, even if they are ethical, you are solely and wrongfully seeking
cash instead of cashflow. This is usually accomplished by advertising only
the existence of a business or product, or offering price reductions and
sales promotions. It is better to promote the fact your business is unique
or special, and not that it is merely "open."
While cash is king, cashflow is definitely a better option. So
here's a question: What can you do to infuse an endless stream of cash
into your business? While every single business is different, with
individual needs, goals and processes, here are two key result areas upon
which you may want to ponder.
1) Business Model
Does your chosen business model (in
other words, the manner in which your business operates, exchanges goods
and markets itself) stimulate cashflow? Or is it one in which the products
or services you offer cause it to lose value, or to become saturated in a
given market, over time? If the latter is true, then it may be your while
to examine how you can change or improve your business model to achieve
cashflow. Here are some key questions:
Are there any other businesses with which you can joint venture in
order to capitalize on marketing opportunities, share markets, upsell your
current customer base or grow (or grow the perceived value of) your
offerings? Are there strategic marketing alliances you can form with
others in order to enter new markets, tap new segments or implement new
business processes on your website?
Can you develop strategic marketing alliances (see my article on
the subject at http://SuccessDoctor.com/article8.htm). Can you develop
info-networks, auto-networks or intra-networks so to grow your marketing
reach? Expand your market? Expedite your orders? Add value to your
offerings? Simplify your customers experience? Reduce costs? Or increase
your customers' transactions?
In short, don't stagnate. Look beyond your business, including
direct and indirect competitors as well as other, non-competing businesses
with which you can team. Look at ways you can generate continuous
customers by increasing either the size of their transactions or the
frequency of such. Often, you can accomplish this with the help of other
businesses or products and in ways of which you may never have thought.
Think "outside the box."
2) Automation
As marketeer Corey Rudl often preaches,
automation is the biggest, and often the most underestimated, opportunity
of the Internet. Whether it's to communicate with your customers on a
constant basis, to accept orders (such as by credit card), or to fulfill
and expedite your orders, automation should be an important aspect into
which you should look.
Are you implementing processes through which you can automate your
business, its operations and, above all, its marketing? Are you constantly
thinking of new ways through which your orders can be filled, your
customers can be served and your marketing can be deployed automatically?
Can it all be placed on auto-pilot?
What I call "auto-pilotizing" is the process through which you can
engineer your business so that it can operate with as little intervention
as possible. For instance, Michael Gerber, author of the bestseller "The
E-Myth," states that in today's fast-paced, convenience-seeking culture
business success is often inherent in a business' capability of becoming
auto-pilotized.
In Gerber's words, it is to think of ways in which you can create
multiple copies of your business that are capable of running by themselves
without your intervention. It is even to think of how you can add
individual value to your business, making it possible to separate it from
the owner as well as sell it at a later date.
Now, the goal here is neither franchising your business nor selling
it -- at least not immediately. The concept is to *think* in this manner
right now. It is to think about how you can automate your business today.
And the more you think along those lines, the more value you will add to
your business and your offerings, as well as the more cashflow you will in
turn create.
However, here's a caveat. Keep in mind that the Internet will
demand a more humanizing experience -- a demand that will keep growing
over time. One of John Naisbitt's "Megatrends," from his book of the same
name, is called "high-tech/high-touch." It means that the more automated
we become the more the demand for social interaction will grow. But the
question is, can automation and humanization be combined? Of course.
Technologies exist today for that purpose -- such as CRM ("customer
relationship management").
(While the Internet is still in its infancy, automation and
certainly humanization are definitely younger. Therefore, there may be an
opportunity lurking in there somewhere for you.) Nevertheless, the
bottom-line is to think cashflow, not cash. The more you do, the more
prosperous and successful you will become.
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