James Schramko here. And all too often, I’m hearing from a business owner that they have run out of cash. I especially get people applying for coaching when it’s just too late and it might be either they’ve got a huge tax bill or they have advertising costs that they haven’t been able to recoup because their offer isn’t converting very well or something changed.
Maybe they got banned from an advertising platform, or maybe their business model just isn’t profitable. So one way to avoid this is, to keep a really good eye on your cash flow. And I encourage my clients to keep some lead metrics, so know in advance if you’re going to have trouble.
In my business, we look at things like how many emails do we send in a month, and we have a look at how many people visited our site in the last 30 days. These are reliable indicators to me of what’s going to happen in the next month. Because my buying cycle is somewhere around seven to 14 days, I know that what we’re doing now in terms of our podcast and video activity will result in sales in the next few weeks.
And I think this came from me spending so much time in a commission environment. When I was selling for a living on a performance basis, my base salary was something like $27,000 a year and then I had to make another $110, $120,000 a year in commission. So I knew if I wasn’t having telephone calls, if I wasn’t following up customers face-to-face, then there would be no sale coming which meant no delivery which meant no commission. So I got used to that lag time.
So the big tip today is, look for a lead metric that is a reliable indicator of what sort of cash flow you’re going to have in the short term and midterm future. I talk about this sort of stuff inside SuperFastBusiness Membership. If you’d like coaching from me, that’s the place to be. And, of course, if you have an already amazing business, if you’re doing several million dollars a year, you might want to look at SilverCircle.com because that’s when we take things up a gear to the whole next level. I’m James Schramko. I’ll speak to you soon.