Business owners who have easy, reliable access to capital often enjoy the flexibility needed to expand and ultimately increase revenue. Positive cash flow is critical to growing a business – unfortunately for many women entrepreneurs, efficient cash flow can be tough to come by. Despite the fact that the number of women-owned businesses increased by nearly 60% from 2007 to 2018, a recent study found that a lack of capital or cash flow is still one of the top challenges facing women in business today.
Negative cash flow is something that plagues many businesses but can be even more difficult for women who often receive less funding. While women own 36% of all businesses across the U.S., only about one-fifth of all VC investments go toward organizations where at least one of the founders is a woman. And even when women are awarded funds, the total amount pales in comparison to what’s received by their male counterparts. Research suggests the average funded amount for women-owned businesses was 31% less than men-owned businesses in 2018.
Cash flow issues specifically, such as missing or late payments and ongoing disputes, can be a significant pain point. But that doesn’t mean scaling a business can’t be done. Alternative payment and credit options promise to continue pushing women-owned businesses toward bigger and better things. From leveraging outside capital to enhancing the customer experience, there are three steps female business owners can take to boost cash flow and grow the bottom line.
Improve the customer experience
One of the most effective ways to open the door for greater cash flow is catering to customers through an improved buying experience. Considering the lengths retail giants such as Amazon go to in order to improve B2C shopping experiences, chances are B2B buyers aren’t going to settle for anything less when it comes to their professional lives. That can be delivered by ensuring each buyer’s preferred payment option is made available at checkout. The more convenient it is for buyers to make a purchase, the better chance that payment in full will be received in a timely manner and that customers will make repeat purchases.
Developing an omni-channel customer experience is a sound strategy for driving buyer loyalty and increasing cash flow. The key is to create an experience that keeps pace with the evolving expectations of today’s buyers. Beyond increasing customer loyalty, women entrepreneurs who opt to enhance the buying experience also stand to pave the way for additional profits. Omni-channel customers are 15% more profitable than online-only shoppers and 25% more profitable than call-in or in-store-only customers.
Businesses can take the customer experience a step further by implementing instant on-boarding. All too often, companies require more than two days to on-board a customer. This delay can create friction throughout the checkout process, slow down purchasing or cause customers to complete a purchase elsewhere. Offering instant on-boarding ensures businesses won’t miss out on potential sales moving forward.
Collecting buyer payments can often prove difficult. Companies around the world must wait an average of 64 days before being paid. Meanwhile, one out of every four businesses has a days sales outstanding (DSO) of at least 88 days. Ending the waiting game that leaves so many organizations without sufficient cash flow requires working with a partner that can seamlessly handle collections. Not only can delegating such duties help limit cash flow gaps, but it also frees up business owners to focus on other challenges – including what expansion may look like in the future.
To move even closer toward realizing a business’ potential owners can use simple integrations in native ERP, CRM or eCommerce platform. Rather than getting bogged down with day-to-day concerns, companies can start to automate and streamline processes. This freedom and flexibility are essential to identifying and taking advantage of new opportunities that can push a business to the next level. In addition to leveraging a lighter schedule to focus more closely on core business functions, businesses should strive to adopt a long-term mindset that can help facilitate growth both now and in the future.
Read the full article on CeoWorld.com