Client communication and cash flow go hand in hand, even though they aren’t often thought of together.
Many areas of your business are connected, and work together to form one cohesive system. That’s why sometimes getting something like being a great communicator and building strong relationships with your clients right can make a difference in a financial area such as cash flow.
Not all business owners – or the people working for them – are naturally great communicators, or are naturally inclined towards relationship building. But if you want a successful business, communication and relationship building are areas you’ll need to put time and effort into getting right.
Not only will your bottom line be affected by how well you communicate with clients, but so will the week-to-week and month-to-month cash flow of your business. This article will explain three reasons why.
1) You get paid faster
Getting paid faster is a reoccurring business issue for many small and medium sized business owners. In fact, timing of payment can have such an impact on business cash flow that it is the reason why many businesses fail, and others succeed.
How well you communicate with your clients will directly impact how fast you get paid.
You need to make sure your clients know when they are required to pay you. It’s often not enough to just state that in your Terms and Conditions – although you absolutely should – but you need to communicate that verbally and clearly with your client as well.
Do not leave any room for ambiguity when it comes to when your client needs to pay you. This often simply requires clear communication.
If you’d like to read more on getting paid faster read our article here.
2) You scope is clear
No matter what service you provide, your scope needs to be clear.
Above we spoke about how important it is that your client knows when they are required to pay you, but it is equally important that your client knows exactly what they are paying you for.
‘Scope creep‘ is the cause of many businesses going under. Not only does scope creep mean you will potentially not make any profit on a job, but it will also mean you won’t otherwise be making profit on a separate job.
That situation is disastrous for cash flow.
Scope creep is something you absolutely want to avoid if you run a successful business, and clear communication regarding your scope is how you stop any misunderstandings with your clients about scope.
Getting the scope clear is a critical way client communication improves business cash flow.
3) You could get more work
The best communicators are often also the best at building relationships.
A key part of communication with clients is ensuring that you regularly do it. If you are running a service-based business and you have high value clients, you need to get on the phone to them regularly.
It is important that your clients are regularly reminded you exist. That is especially the case for clients who might refer you new clients.
Building good will by having great relationships with clients is critical.
Getting a healthy amount of new work in by being a great communicator with your clients and building relationships will improve your business cash flow position.
If you’d like help improving your business, please do not hesitate to get in touch.I’m interested in business help