What if the market for your product or service could be increased?
The payment options you offer your clients may limit your market size. Opthalmologists found this the case with lasik eye surgery. Since this is a procedure not covered by most health care plans, the market for this procedure originally included only those who had several thousand dollars cash to pay for the procedure. Admittedly, this would limit the market size! In order to expand their market, opthalmologists offered a payment plan to clients. They required a deposit up front which covered their hard costs and the remainder was paid automatically in installments from the patient’s bank account. This turned into a win-win situation for the opthalmologists and the patients. More patients were able to afford the procedure by spreading the cost over time, while the opthalmologists minimized their risk by receiving a sizeable deposit upfront. This same approach has long worked in buying an automobile. If we all had to pay cash for our cars, we might be driving slightly different models! Would the market for a product or service in your business be enhanced if you were to offer additional methods of payment? If your payment options limit your market size, you may want to rethink your current payment options to increase your cash flow.
Cheryl Cook works to develop business relationships where her experience, knowledge, and ideas can help improve the small business owner’s cash flow. As the Executive Director of Pro Money Inc., Cheryl conducts workshops with the Chamber of Commerce and teaches adult education classes on topics related to cash flow. Cheryl publishes an ezine every other week titled “Cash Flow Tips for Your Business.” [http://www.promoneyinc.com]