-- By Category
-- E-commerce and Internet
-- If Cash Is King, Cashflow Is The Castle
If Cash Is King, Cashflow Is The Castle
If Cash Is King, Cashflow Is The Castle
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*.
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."
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
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.
About the Author
Michel Fortin is an author, speaker and Internet marketing consultant dedicated to turning businesses into powerful
magnets. Visit http://SuccessDoctor.com. He is also the
editor of the "Internet Marketing Chronicles" ezine delivered weekly to 100,000 subscribers -- subscribe
free at http://SuccessDoctor.com/IMC/
Tags: E-commerce and Internet