The Basics of Reviewing your Business Model

The Basics of Reviewing your Business Model

Reading Time: 3 minutes

Your business model is your business’s plan to make a profit. It’s an outline of how your business plans to make money which allows you to identify your target market and their needs, the expenses you should anticipate as well as the products and services your business plans to sell. Business plans are important for both new and established organisations, as they help businesses attract investment and talent. Importantly, they help assess whether things are working the way you want them to.

To keep ahead of trends and changes, it’s important to review and update your model. Here are 4 ways to consider reviewing your business model. 

1. Customer value proposition
2. Profitability
3. Resources
4. Processes 

 

Customer value proposition


Do you still resonate with your customers and are you taking their feedback into consideration? Reviewing your value proposition is a great way to establish your relevance in meeting your customers’ current problems, or how you can make adjustments to your product to keep improving their situation. Doing customer research to establish what your customers need can help you in this process. It can give you quantified feedback on the specific benefits of your products. You can find some useful tips for this on our blog post How to Drive Sales Through Customer Retention. It could also spark ideas that you may have overlooked initially. Remember to solve real and important problems for your customers, maintain your differentiation from competitors, and remind your customers why they should trust your brand.  

Profitability

It’s imperative to understand your profitability for the success of your business. The profit your business makes should be used to help secure growth opportunities. Analyse how your business brings in money and opportunities for growth. Start with a profit and loss statement. If you don’t already have one in place, you can start by individually listing how your business generates income and spends money. Also, consider doing a pricing review to understand if you’re making enough margin to be profitable. Once you’ve consolidated the audit, you can try to eliminate work that costs you money and focus on opportunities that generate income. To get a good idea of how to approach this, have a look at Freshbook’s step-by-step outline on how to check if your business is profitable. 

 

Related: How to Drive Sales Through Customer Retention 

 

Resources

Take some time to consider if the resources currently available to you are appropriate for your business model and how it’s evolving. Do you have access to the right people, and are you meeting your financial goals? Whether the answer is yes or no, it’s always a good idea to review this aspect of your business. Consider your capacity and demand management, your resource utilization as well as your progress and time tracking. It’s important to establish your actual resource availability and to get a realistic view of your demands and capacity to deliver. Understand what roles and skillsets you need and streamline communication between your employees and the business, as well as with your stakeholders. If you’d like some ideas on how to get started, Planview – a portfolio and work management solutions organisation – has great advice on resource management best practices. 

Processes

To run a business, processes are used every day. In the quest for efficiency, it’s important to review them and keep the ones that make sense, and improve the ones that don’t. With rapid changes in technology and the evolving demands of your target market, dysfunctional processes can lead to breakdowns in communication, increased costs, or unhappy customers to name a few challenges. Make this an important step to review to help streamline your tasks and business activities. To get started on this consider these steps recommended and outlined on Mindtools:


Step 1: Map the process
Step 2: Analyse the process
Step 3: Redesign the process
Step 4: Acquire resources
Step 5: Implement and communicate change
Step 6: Review the process     

 

Related: How to Write the Perfect Business Plan 

 

Running a business is hard work, but regularly reviewing your Business Model can make planning for the future easier. Make it a priority to keep up with the ever-evolving needs of your clients, talent, and expectations of any investors so you can stay relevant. Try not to overlook the components that make you successful and how you can upgrade them. Remember, if any of your adjustments need financing that you might not have at the time you can always get in touch with one of our Funding Specialists at Lulalend to find out how we can help you meet your business objectives.

 

The SME Guide to Improving your Cash Flow

The SME Guide to Improving your Cash Flow

Reading Time: 3 minutes

The latest guide in our Business High Five series, The SME Guide to Improving your Cash Flow, offers useful insights to help you manage and improve your business’s cash flow and increase profits. 

 

Download our complete guide to Improving your Cash Flow

 

In this guide, your SME will be able to make use of insights on:

  • The Importance of a Cash Flow Strategy
  • Practical Tips on How to Manage your Cash Flow
  • Technology to Help Manage your Cash Flow in Real-time
  • Sustaining Your Cash Flow Improvements
  • Cash Flow Management Tools

 

 

The Importance of a Cash Flow Strategy

Proper cash flow management is a critical strategy that any business owner must understand if they want to achieve long-term financial success but is also one of the most difficult issues that business owners confront. 

Reliable cash flow projections are likely to increase shareholder trust, while enhanced budgeting should help you gain better control over costs and generate higher profits. 

 

Practical Tips on How to Manage your Cash Flow

The best way to avoid a cash shortage is to plan ahead. As soon as you foresee a cash shortfall coming up, it’s important to look at all the options you have to increase your cash in hand.

 

  1. Be forthcoming with customers
  2. Review your operational expenses
  3. Re-evaluate the pricing of your goods and services
  4. Secure funding before you need it

 

Related: 3 Ways Bridging Finance Instantly Improves Cash Flow for Your Business

 

Technology to Help Manage your Cash Flow in Real-time

As a business owner, you should use technology to simplify and improve the efficiency of your company’s operations. You can budget and easily forecast future cash flow when you can see all of your business’s financial activity and accounts in one place. This is where online financial management dashboards can add so much value. 

Sustaining Your Cash Flow Improvements

Any cash flow improvements you gain may soon deteriorate if you do not have an adequate cash management system. Many SME owners ignore the small changes that can be made to their operations, believing that the changes are insignificant and not worth the effort. However, a combination of minor modifications to inflows and outflows will have a significant influence on your overall cash flow.

 

Related: The SME Guide to Cash Flow Management

 

Cash Flow Management Tools

Our talented financial experts at Lulalend have put together a list of cash flow tools to help you get a better view of your businesses’ finances so you can plan more accurately for the future. The two options below have proven beneficial for many businesses across the board and are worth the investigation.

PlanGuru

Float

 

Download the full SME Guide here.

 

What can 60 days of cost-free* funding do for your business? 

To help SMEs get the funding they need to grow their business sooner, rather than later, we offer a 60 day delayed repayment option to all first-time customers. So if you apply for funding today, you won’t have to start repaying for 2 months.  If prompted enter promo code LULA when applying.

 

4 Ways to improve your business’s cashflow

4 Ways to improve your business’s cashflow

Reading Time: 3 minutes

Keeping track of your business’s incoming and outgoing cash flows can be tricky, but is critical during uncertain times where revenue may fluctuate. Here are 4 simple and useful actions you can start today to help you manage and improve your business’s cashflow. 

 

Here’s a quick look at what this article will cover: 

  1. Invoice quickly
  2. Offer various payment options
  3. Use software to manage your cashflow
  4. Review your operational expenses regularly

 

Invoice quickly

The faster you invoice your customers, the quicker you’ll get paid.  Rather than waiting until the end of each month, send out your invoices as soon as you have rendered a service or delivered goods. Your customers will still have 7, 30, or 60 days (whatever your business terms may be) to pay, but you’ll save yourself valuable time right from the start. With Lulapay, you can invoice your customers & get paid immediately while still offering them payment terms. Find out more about Lulapay here.
If this doesn’t work, you can also send payment reminders to those “late-comers” or simply pick up the phone and call them.

 

Offer multiple payment options

By offering your customers various ways to pay, including online options such as accepting credit cards, debit cards, or mobile payments, the more likely they are to pay you faster. For example, making use of mobile payments can get you paid on the spot as soon as the job is done. There are plenty of ways of doing this by using services such as YOCO, Zapper, Snapscan, and even Masterpass

 

Related: 7 Ways to manage your cashflow in your construction business

 

Use software to manage your cashflow

Managing the cash flows in and out of your business can be challenging enough, but dealing with the additional accounting and tax work that comes with it is another task. Consider using a cloud-based accounting system such as Xero & Sage to make managing this easier. More advanced systems come with built-in plugins like project costing, quoting, and inventory management to help alleviate the burden of system administration and automate these processes for you – giving you valuable time to focus on growing your business. 

 

Review your operational expense regularly 

Managing your cashflow isn’t only about the money that comes in, it’s also important to reduce the cash going out of the business as much as possible. Take the time to review your expenses and see in which areas you can reduce your operational costs. Avoid spending money on things that aren’t necessary for your business and choose wisely which areas you want to focus on. Make sure you cut costs only where you can afford to and don’t cut back in areas that may harm your business. 

 

Related: Practical cost-saving tips for your business

 

Understanding your business’s cashflow will not only help you plan for future growth & development but will also give you great insights into your businesses’ current financial state and how cash is moving within your organisation. 

 

The SME Guide to Building Customer Loyalty

The SME Guide to Building Customer Loyalty

Reading Time: 3 minutes

The latest guide in our Business High Five series, The SME Guide to Building Customer Loyalty, offers useful insights on how to keep customers coming back and staying loyal to your business.

 

Download our complete guide to Building Customer Loyalty

 

In this guide, your SME will gain insights on the following:

  • The Importance of Customer Loyalty
  • How to Measure it
  • The Six Stages of Loyalty
  • Steps to Retain More Customers
  • The Future of Customer Loyalty

 

 

The Importance of Customer Loyalty

Customer loyalty is the act of continually choosing one company’s products and services over its competitors. Customers that are loyal to one business are not readily influenced by price or availability. When necessary, they are prepared to pay extra to obtain the same high-quality service and product they are accustomed to.

High levels of customer loyalty help drive business drive growth in a number of ways:

  • Returning customers spend more
  • Loyal customers refer their friends, helping to acquire new customers at lower costs
  • Both of which lead to increased profitability

 

Related: How to Drive Sales Through Customer Retention

 

How to Measure it

Loyalty isn’t a concrete concept, yet it can still be measured. To do so, it’s often necessary to employ a variety of metrics. Some of the most practical examples are:

Customer Satisfaction Levels

Two easy-to-implement and understand methods of measuring customer satisfaction are:

  • Word-of-Mouth referrals
  • Net Promoter Score

 

Customer Lifetime Value

Your customer lifetime value (LTV) reflects how important a client is to your company throughout their relationship with you.

 

Repeat Purchase Rate

The percentage of clients that return to buy your product or service is known as your repeat purchase rate.

 

Six Stages of Loyalty

On the journey to becoming truly loyal to a brand, a customer typically progresses through six phases, with each stage demonstrating an increasing level of loyalty.

 

Related: Why your SME should consider a Customer Relationship Management platform

 

Steps to Retain More Customers

You can increase customer loyalty by excelling at the things that influence it. Here are five essential factors that drive loyalty:

  1. Offer a 10X better experience than competitors
  2. Make customers feel valued 
  3. Understand the full consumer journey 
  4. Long-term planning, not quick fixes
  5. Employee experience

 

The Future of Customer Loyalty

Today, instead of going to the local shopping mall, 85% of customers start their search on Google. Customers may compare costs across all businesses online by just entering in a description of what they wish to buy. They may get it delivered the next day with just one click. Customer loyalty driven by traditional influences is fading as competition rises.

The most successful businesses will be those that truly understand their customer needs & focus on providing the best customer experience.

 

Download the full SME Guide here.

 

What can 60 days of cost-free* funding do for your business? 

To help SMEs get the funding they need to grow their business sooner, rather than later, we offer a 60 day delayed repayment option to all first-time customers. So if you apply for funding today, you won’t have to start repaying for 2 months.  If prompted enter promo code LULA when applying.

 

5 Practical ways to improve customer retention

5 Practical ways to improve customer retention

Reading Time: 4 minutes

Simply put, customer retention entails keeping as many customers as possible. It begins with a client’s first interaction with your business and continues throughout the lifetime of the relationship.

 

In this article, we’ll look at five effective techniques to increase client retention, loyalty and transform existing customers into brand ambassadors:

  1. Manage expectations
  2. Maintain top-of-mind awareness
  3. Maintain customer communication
  4. Implement great customer support
  5. Implement customer rewards programs

 

Managing expectations

First impressions are important, but if a prospect already has expectations, make sure they are manageable. You want to wow your customers, but if you promise more than you can give, a prospect or client will quickly abandon you.

Prospects will likely believe you can’t supply what they need if you establish expectations that are too low. You need to offer high-quality performance over the long term while maintaining reasonable, realistic expectations by:

  • Not making exaggerated claims
  • Understanding and focusing on what really matters to clients
  • Being aware of your limitations
  • Being open and honest
  • Being adaptable in terms of timing
  • When your plate is full, be honest & say no.

 

Maintain top-of-mind awareness

You know how everyone commonly refers to chewing gum as Chappies. That’s because the Chappies brand is so strong that when someone wants a piece of gum, the first thing that comes to mind is, “Can I have some Chappies?.”

Top-of-mind awareness is a metric that assesses where your brand ranks in the minds of consumers. Being top-of-mind isn’t only handy; it’s also necessary. When it comes to communicating with a prospect, sales professionals have a 50% better probability of converting the opportunity when a brand has a high top-of-mind score. The more well-known the brand, the more likely the general public will purchase their product or use their service.

It is critical to build tactics that engage both your potential and existing, customers on a consistent basis. Some effective techniques to develop your brand and maintain top-of-mind awareness with your customers are:

  • Don’t wait for your customers to ask for it; instead, proactively provide value to their lives and solve problems for them.
  • Create meaningful human interactions.
  • Send regular product and business updates to your customers.
  • Check up on your customers on a regular basis without becoming overbearing.
  • Personalise your marketing and communication.

No matter how far you get with a customer, don’t jeopardize the connection by focusing purely on the next prospect. Maintain meaningful connections with all customers, even after a sale has been made or a project has been completed.

 

Maintain customer communication

Even if your customers aren’t coming to you, you should be proactive in reaching out to them. If your clients haven’t connected with your brand in a while, reach out and re-establish your relationship. Consider using a communication calendar to manage client encounters and create upsell and cross-sell possibilities. It’s important to continually make your customers feel recognised and valued.

A communication calendar is a document that records customer communication. It shows you when a customer contacted you last and alerts you to when current clients haven’t connected with your business in a while. This makes it simple to roll out promotional offers and proactive customer support solutions before customers disengage. For example, if a customer’s membership is about to expire, you can send them an email informing them that their account must be renewed and the benefits of doing so.

A Marketing Automation, or CRM, platform can help streamline the task of delivering personalised, proactive customer messages at scale. 

 

Related: Why your SME should consider a Customer Relationship Management platform

 

Implement great customer support

Fast, reliable & accurate customer service will make the largest difference in your company’s success. Look at ways to use technology and Artificial Intelligence solutions to help your support and service staff to offer better support to your clients.

Chatbots: Using chatbots to solve simple inquiries can assist in shortening the time it takes to respond to queries and issues. 

Respond quickly to customer complaints: The longer you wait to answer, the more irritated the consumer becomes. This is very damaging to a business’s reputation. When you reply quickly and fully to a complaint, even if the customer is still irritated, it demonstrates that your support team cares and takes significant and thoughtful action.

Answer questions with enough information: If someone asks you a question you thought was apparent, take it as a sign that it might not be that clear after all. If they ask you a question you’ve previously answered, you might not have answered it properly or clearly enough.

 

Related: How to Drive Sales Through Customer Retention 

 

Implement customer rewards programs

By creating a client loyalty program, you can offer rewards to individuals who have been with you the longest. This encourages existing consumers to continue buying with you. Your CRM system can assist you in identifying your company’s most valuable clients.

For example, airline Frequent Flyer programs provide miles, points, and other forms of recognition to their passengers. Another example is offering unique, personalised, discounts to your most valuable clients. Putting in place a loyalty rewards program is an effective (and automated) strategy to keep consumers since it benefits them on a continuous basis.

Your rewards program does not need to be complicated. A simple stamp card with discounts always does the trick. You can always use a simple program, to begin with, while you continue to prove the value they offer to your customers. There’s also the option to outsource a more advanced rewards program. Companies like Yoyo Group can help you set up, manage and facilitate your loyalty programs. 

 

While there are many ways to keep your customers hooked on your business, it’s important to consider the techniques you use to maintain those relationships. Long-term customers are almost always more profitable and buy more regularly than new ones. Neglecting your existing customers in favour of continually acquiring more clients will lower your profitability and eventually leave your sales funnel empty.

 

The SME Guide to Sales Optimisation

The SME Guide to Sales Optimisation

Reading Time: 3 minutes

The latest guide in our Business High Five series, The SME Guide to Sales Optimisation, offers practical tips on how to boost your sales by optimising your sales funnel.

 

Download our complete guide to Sales Optimisation

 

In this guide, your SME will benefit from insights on the following:

  • Understanding a sales funnel
  • How do conversions occur?
  • Improving each stage of the sales funnel
  • Practical tips on how to convert leads to customers
  • How marketing can support your sales optimisation

 

 

Understanding a Sales funnel

A sales funnel is a medium for visualizing where customers are in the process of making a purchasing decision.

Related: How to Drive Sales Through Customer Retention

 

How do Sales conversions occur? 

Businesses all too frequently want to turn an opportunity into a deal straight away. Consider moving your prospects through your pipeline with a sequence of minor conversions. This will eventually result in a deal being completed. It’s easier to understand this by looking at a sales chart. 

 

Improving each stage of the Sales Funnel

Let’s take a closer look at each level of the funnel and the strategies you can use to boost conversions at each stage.

 

Step 1: Increase Awareness

Ultimately, your goal is to ensure your target audience is aware of your business and what you offer. People cannot buy from you if they are unaware that you exist.

Step 2: Encourage Consideration

Once your audience is aware of your business, it’s vital that you generate enough trust and interest for them to consider you as an option

Step 3: Drive Preference

Now that you have your prospect’s attention,  it’s time to educate them about your product or service. They have indicated they are receptive to more information, so you need to provide this quickly and in a compelling way.

Step 4: Simplify the Purchase

Now is the time to seal the deal and make the conversion. Remember, before they are willing to buy, the average buyer wants to view a deal at least SEVEN times. 

Step 5: Build Loyalty

You’ve done well, now you need to keep the customer coming back to you. It is much cheaper to market to and retain an existing customer than to acquire a new one. 

 

Related: 3 Ways To Cut Unnecessary Spending In Your Business

 

Practical tips on how to convert leads to customers

According to Lulalend’s Sales Operations Manager, Jasmine Beckett, spending time and money generating leads for your business is only worthwhile if you can turn these potential buyers into paying customers. Here are her three top tips for converting leads to customers. 

  1. Qualify the prospect
  2. Follow up fast
  3. Structure your team

 

How marketing can support your Sales optimisation

Perhaps Marketing’s most important task is to clearly define who is the priority audience for the business’s products and services. “Develop a complete understanding of this audience including; What problem your product or service solves for them, how do they currently solve it, what are the end benefits to the customer from solving their problem and where will you find this audience. 

 

Download the full SME Guide here.

 

As always, we want to help your SME succeed. 

To help SMEs get the funding they need to grow their business sooner, rather than later, we offer a 60 day delayed repayment option to all first-time customers. So if you apply for funding today, you won’t have to start repaying for 2 months.  If prompted enter promo code LULA when applying.