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Consistent Cash Flow

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No Cash, No Success

"Never take your eyes off the cash flow because it's the life blood of business"
Richard Branson
English British Magnate

The Rise of the Small & Mid Size Business

Driving the rise of today’s businesses is enthusiasm from customers, providers, and investors, for disruptive business models across sectors, from financial services to manufacturing. Yet as they roll out many offerings, many organizations find that their internal processes and systems can’t keep up with the customer expectations and operational realities, hindering growth. One critical process to examine and reinvent is the end-to-end business process for quoting, contracting, invoicing, collections, and renewals.

Optimizing your business cash flow requires a series of concerted design decisions and trade-offs across the end-to-end customer journey. At the highest level, it involves striking the right balance between the standardization of your offer’s simplicity and customization to offer flexibility. We discuss these areas of standardization should you opt-in to our newsletter.

"Too often we measure everything and understand nothing. The three most important things you need to measure in a business are customer satisfaction, employee satisfaction, and cash flow. If you’re growing customer satisfaction, your global market share is sure to grow, too. Employee satisfaction gets you productivity, quality, pride, and creativity. And cash flow is the pulse—the key vital sign of a company."
Jack Welch
Famous or infamous former CEO and Chairman of GE

Optimizing Your Cash Flow

A typical enterprise business with the latest offer seeks to land a significant new client to give their business a meaningful boost to the latest sales figures. Unfortunately, the sales team agreed to a deep discount to win the deal despite committing to provide extra help during implementation and a higher-than-standard level of ongoing support. During the customer’s onboarding, it became apparent that the combination of a lower-than-usual fee with a higher-than-usual servicing cost would result in a loss. Adding to the pain, a year later, the customer opted not to renew the contract, citing poor service.

Sound familiar? It is not unusual for any business to take standard offerings and customize for individual customers to give them a compelling reason to buy. But diverging from the norm makes it more complex and expensive to deliver what’s promised. And implementing and supporting custom solutions in a way that fits with a company’s existing processes is often impossible.

Of course, other businesses have had decades to perfect the systems, costs, and quality issues associated with selling and delivering traditional products. But best practices for selling and delivering today’s state-of-the-art products/services are still evolving. From initial opportunity to final payment, the path is incredibly complex for an as-a-service sales group. It requires collaboration from sales with legal, operations, finance, product, IT, customer support, professional services, and other functions. As a result, tension points can bubble up anywhere, from prospecting a lead to negotiating the deal to collecting an invoice or renewing a contract.

Your business needs to consider every design decision carefully, or it can be costly to sell through to delivery. For example, 

  • Do you address the feedback from your business’ sales group that the process has too many bottlenecks requiring a lot of communication to move a quote to an invoice? Does the sales team have to generate quotes manually? 
  • Did you receive and address feedback that the entitlements system was not ready and or manually producing invoices is slow? With no clear direction on enterprise-wide choices, it leaves each salesperson to shepherd their deal through multiple functional teams. 

Customers are initially excited to embrace your fantastic offer, but the inability to scale will put your growth plans on hold.

The complexity of a growth business, particularly moving from opportunity to cash flow, is associated with:

  • Slower sales motion,
  • Poor customer experience, and ultimately
  • Decreased ability to grow.

Higher-growth small or mid-size companies consistently demonstrate a set of practices that help minimize internal friction through standardization and retain the flexibility to meet customers’ critical needs.

When the stakes are rising, and the demand for your products/services is growing, organizations must ensure all areas of the end-to-end sales journey align with a series of carefully designed decisions. The right opportunity to cash flow processes can be a powerful growth driver. It is a complex undertaking, but those that adapt best practices to design their process to fire on all cylinders across each attribute achieve sustainable competitive advantages.

“We were always focused on our profit and loss statement. But cash flow was not a regularly discussed topic. It was as if we were driving along, watching only the speedometer, when in fact we were running out of gas.”
Michael Dell
American Billionaire

Prioritizing Cash Flow

bEffective helps your business address four areas for achieving tangible improvements in internal processes and customer service. You can find insights for each of those areas should you sign up for our newsletter

For example, we aim to improve:

  1. Clarity of product portfolio,
  2. The ‘how-to’ create and deliver products, 
  3. The systems for delivering those processes and, of course
  4. The skills of the people involved.

The standard tension points we expect to find in your business upon addressing these improvements are as follows:

  • Offers are too complex, or
  • delivery doesn’t match the customer’s sector, or
  • Margins shrink during delivery or
  • Financial or operational performance data is missing during crucial parts of your sales process.

Usually, one or all of these four scenarios occur during the lead to opportunity phase, opportunity to order, order to invoice, or finally invoice to cash phase.

In the end, some of the typical results when optimizing opportunity to cash include: 

  • 50 percent reductions in the time that sales representatives spend on back-office tasks, 
  • 10 percent increases in deal margins, and 
  • Customer satisfaction improvement of up to 15 points out of 100. 

bEffective’s strength is helping your business with the difficult task of aligning the link between opportunities to cash flow. McKinsey & Company’s research confirm if your business does optimize these processes, you will have tremendous success in:

  • Adding new accounts,
  • Growing existing accounts, and
  • Reducing customer churn. As a result, you will
  • Grow annual recurring revenue (ARR) at four times the rate of others.

 

“Well Done Is Better, Than Well Said.”
Benjamin Franklin
One of the founding fathers of the U.S.

Action Step

You’ve read our promise for the challenge you may be facing along with the ‘how-to’ solve it.

bEffective offers services to help your business establish its revenue growth management (RGM) as a whole or one of the RGM modules that you need help to improve.

Should you wish to do it for yourself, check out our resources menu for ‘how-to’ to solve the challenge mentioned above and others in this area of our website.

Remember that research and science dictate that building the ‘right’ revenue growth management (RGM) approach needs to be built in sequence, integrated, and more to achieve the promised percentage, dollars through to consistent cash flow.

Alternatively, please opt-in to our newsletter for appropriate daily and tactical daily aids.

Or begin with a comment about the article. Everything we’ve mentioned on our website requires leadership that makes bold and decisive action. So be bold, decisive, and insightful with your comments. We will appreciate it.

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