00:00another big piece on the financial side that's going to allow you to scale your business which
00:11we talked about in another video is your capital flow and your access to capital so what can we do
00:17what are some strategies that we can use to bring more cash flow into your business and keep
00:23yourself cash heavy well we can charge customers more up front so i work with gcs and a lot of
00:29places here in dallas and oftentimes they'll charge 30 to 50 percent of whatever the job is
00:37up front okay so we've covered the cost of materials and a few of the things
00:41ideally like the best situation would be that you're the best in the industry and you can build
00:46it all up front right or you have what we talked about in another video which is sunk costs so
00:51people pay you a lump sum up front and then you have a residual that keeps them on board after that
00:56depends on your product offering whether it's a product or service or you've productized your
01:01service which is another fantastic way to do this if you do have a service model that's on a reoccurring
01:08revenue basis maybe you're billing quarterly instead of monthly and you can aggregate some more of that
01:14cash flow up front to help scale your business credit lines are another fantastic way to do this
01:20so you want to push your terms with with your vendors out uh if you're at 30 days you want to
01:26ask them for 45 if you're at 45 you want to ask for 60 if you're doing enough business with them you
01:32can ask for 90 and 120 uh which you don't want people doing to you and that's what i'll come out
01:38on the other side but you definitely want to do that with your vendors and suppliers so if you can get
01:4360 day terms or longer that is ideal because again that's going to keep more cash in your business
01:48for longer and allow you to make money with your money you can reinvest that cash into the business
01:53so for your customers you want them to pay you faster and there are a lot of different ways to
02:00do that some of which we just discussed but if they're net 30 you can offer them a 2 in 10 incentive
02:07so if they pay within the first 10 days they get a 2% discount and that can backfire sometimes
02:13because people still take the discount even if they don't pay within 10 days but most of the time
02:16they will pay much faster because you're going to give them a discount for doing so so if it's b2b
02:21that's one way to do it if it's b2c uh discharge them more up front right there needs there needs to
02:29be a sunk cost you can raise your margins often so again um work with different people if if you're
02:37bidding jobs and you're gc and you're you're not losing any it's a good indicator that you're probably
02:44too low you need to raise your prices um and that's applicable across a bunch of different
02:50industries you need to figure out uh what you can do to differentiate yourself and we'll talk about
02:56a moat um and and your unique your unique uh selling proposition and another video but if you can
03:04differentiate yourself from your competitors and charge a premium uh you look at products like
03:09a ferrari or rolls royce or some coach bags or prada right they're they're a high-end item did it cost
03:21them any more to manufacture those goods maybe a little bit okay yeah there probably is some certain
03:29standard that they have built in there that provides the quality that is you know above other people that
03:36are in a competitive market on the low end uh but at the same time their margins are still ridiculous
03:42so anything you can do to increase your margins uh it could be cutting costs it could be negotiating with
03:48prices with vendors it could be i always prefer to make more money to try to cut costs but both
03:56are viable solutions you you walk through a bunch of different things and that's what i do with business
04:00owners in the first 30 days along with look at their taxes to try to save the money there
04:04um and work through their financials that's not only the first piece but this is always a discussion
04:10that i have with them how can we get more money faster and push out our our bills later on so that
04:17we have more cash to scale right now
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