🧠 The Lifeline of Your Business

Happy Tuesday,

Welcome back to the 25th edition of the Nord Media newsletter.

Before we get started – I’d love to connect with more of you on social media! Give me a follow and shoot me a DM - let’s chat  Twitter • LinkedIn • Instagram

The other day I came across a really interesting statistic. 

It said that somewhere around 70% of lottery winners go bankrupt within ten years of winning the money.

Honestly, that's not surprising at all.  

Why? 

They start splurging on sports cars worth $200,000 each, purchasing $2 million penthouses, investing in designer watches costing $5,000 apiece and taking lavish trips to the Maldives and Paris.

The result?

They burn through all their money insanely fast.

Because they lack any skills to manage their cash.

It got me thinking…

Although the odds of actually winning the lottery are minimal (A guy can always dream).

I see way too many business owners fall into the same trap of scaling to 7 or 8 figures and then misusing their dollars– leading to major revenue loss and bankruptcy. 

So, I created a complete Cash Flow Management Guide that’ll keep your business net positive long term:

🚀 This Week’s Product Highlight 👉 Surefoot

Tell me if this sounds familiar: meh conversion rates and sky-high acquisition costs.

It’s incredibly frustrating when you don’t know why or what to change so you just spin your wheels hoping something works…

OR you could save all that time and frustration and trust Surefoot to handle things in a way that’s unique to your business and your problems.

They’re a small team who focus on real user data to improve your customer’s experience and drive real results.

They have a 75% renewal rate and a 9.6x ROI for a reason.

If you’re ready to see real change in your marketing strategy, Surefoot can help.

Find out how —> HERE.

Positive Cash Flow = Healthy Cash Flow

Positive cash flow means that more money is coming into the business than going out.

I’ve seen many businesses that are still in growth mode spend way more than they earn. You can't sustain growth without a healthy cash flow—it will catch up with you eventually.

There’s a difference between getting by and prospering. To truly prosper, you need enough cash flow to invest in growth opportunities, such as 

• Marketing campaigns, 

• New product development, 

• or Expansion into new markets.

Funding Methods

If you’re looking to start a business, the first order of business is raising $$$.

There are several methods of financing a startup. Some founders tap into their personal savings, while others take out loans or seek funding from venture capitalists. 

Here’s a full breakdown of the different types of funding:

Bootstrapping

Bootstrapping means funding your business with your own money, like personal savings or the cash you make from the business itself. 

• You keep full control and don’t have to give up any ownership. Plus, it makes you spend wisely and focus on what brings in money. 

• But growth can be slower since you’re working with limited funds, and you’re risking your own money. 

• Also, bootstrapping might not work well if your business needs a lot of upfront cash.

VC Backing

With venture capital (VC) backing, you get big investments from venture capitalists in exchange for a share of your company. 

• You get a lot of capital, which can help you grow and scale quickly.

• VCs bring valuable industry expertise, strategic advice, and connections that can boost your credibility and attract more investors.

• The only downside - you’ll have to give up some ownership and control, and VCs often push for fast returns, which can lead to pressure for aggressive growth. 

• Also, disagreements about the business’s direction can sometimes cause friction with your investors.

Loans

Taking out loans involves borrowing money that you’ll need to pay back with interest. 

• The good news is that you can keep full ownership and control of your business and benefit from tax-deductible interest payments. 

• Loans also come with a clear repayment schedule, which can help with financial planning. 

• However, you have to pay back the loan regardless of the business's performance, and loans often require collateral, which can be risky for both your business and personal assets.

• Plus, having debt can limit your financial flexibility and strain your cash flow.

Before deciding on a funding method, you should consider a few things:

• How much money do you need?

• How does your business model work?

• What is your timeline?

• What are the terms of the funding?

Take the time to weigh these factors to choose an appropriate funding method. This will guide you in making the best choice for your business’s success.

Cashflow Management For Different Revenue Ranges

Now, let's get into the actual management part of the Cash Flow Management Guide.

Depending on your DTC brand’s revenue range, you should be putting your focus on different efforts:

Less than $1 Million

Focus on survival and establishing a strong foundation.

• Tight Expense Management: Keep overheads low. Avoid unnecessary expenses and negotiate better terms with suppliers.

• Inventory Management: Avoid overstocking. Use demand forecasting and just-in-time inventory to minimize holding costs.

• Cash Flow Forecasting: Regularly update cash flow projections to anticipate shortfalls and plan accordingly.

• Customer Acquisition Costs (CAC): Focus on cost-effective marketing strategies like content marketing, social media, and partnerships to acquire customers at a lower cost.

• Payment Terms: Negotiate favorable payment terms with suppliers and encourage early payments from customers by offering discounts.

$1 - $5 Million

Focus on scaling operations and improving efficiency.

• Operational Efficiency: Invest in automation and technology to streamline operations and reduce costs.

• Diversify Revenue Streams: Introduce new products or services to diversify income sources and reduce dependency on a single product.

• Improve AR/AP Processes: Optimize accounts receivable and accounts payable processes to improve cash flow. Implement efficient invoicing and follow-up systems.

• Cost Control: Regularly review expenses and identify areas where costs can be reduced without compromising quality.

• Financing Options: Explore financing options such as lines of credit to manage cash flow during growth spurts.

$5 - $10 Million

Focus on sustaining growth and preparing for larger-scale operations.

• Working Capital Management: Maintain sufficient working capital to support day-to-day operations and invest in growth opportunities.

• Strategic Investments: Make strategic investments in areas that drive growth, such as marketing, technology, and talent acquisition.

• Cash Flow Analysis: Conduct detailed cash flow analysis to identify trends and make informed financial decisions.

• Supplier Relationships: Strengthen relationships with key suppliers to secure better terms and bulk purchasing discounts.

• Financial Reporting: Implement robust financial reporting and analysis to monitor cash flow performance and make data-driven decisions.

Closing Thoughts

Scaling is amazing—one of the best feelings a business owner could have.

It’s physical proof that your business is successful and consumers want your products. 

But like a lottery winner, don’t let the big numbers and revenue get to your head. 

Stay focused on your visions and goals and create sustainable cash flow management plans to keep your business operating for the long haul. 

🧠 My Personal Product Recommendations for You
surefoot - What would a 10% conversion rate increase mean for your business? It meant a lot to Brooklinen, whose VP of Product says “surefoot.me has been a reliable partner for us over the years. Highly recommend them!”

With clients like Helen of Troy, The Shade Store, and Brooklinen their proven strategies ensure you convert more shoppers to buyers. 👉 Get in touch today and start improving your revenue.

Revenue Roll helps ecommerce brands maximize revenue per site visitor by identifying high-intent shoppers and providing everything needed to convert them across channels.

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Segments Analytics - Easily sync tailored customer segments into marketing channels like Klaviyo, Google, and Facebook with Segments Analytics. With personalized and well-timed campaigns, brands see up to a 30% increase in customer retention and significant boosts in repeat spend. No need to worry about complex installations or coding—their system processes your store's data within 48 hours. Start your 14-day free trial HERE.

Juo Subscription - There’s nothing more frustrating than losing those subscriptions you’ve worked hard (and paid) for. If you’re struggling with subscription retention, Juo Subscription's toolkit helps you keep subscribers by tailoring offers to their needs. Brands using Juo Subscription see up to 50% lower CAC and a 30% increase in subscriber retention rates. Book a demo now to see how Juo Subscription can help you.

Chase Diamond’s organic LinkedIn growth A lot of people have reached out and asked about my explosive growth on social media over the last 6 months. I’m happy to share I’ve been working with Chase Dimond and his growth services to help gain momentum and continue growing. This has been a primary factor in my growth and Chase has been kind enough to offer a special discount to my readers. Simply click here to learn more and get started.

Have a specific question or something I can help with? Shoot me a message on twitter and I’ll typically answer within 24 hours 👉 Twitter 

Want to learn from me or connect on other platforms? 👇
 LinkedIn • Instagram

Thank you for reading! I appreciate you.
Sincerely,
Kody