Canadian Small Business Women

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Know your Numbers!

Uchechi

Most people that know me well know that I love looking at numbers. I love creating budgets and expense tracking sheets to manage both my personal and business expenses. I love to look at how my business makes money and look at different opportunities to bring in additional sources of revenues into my business. However, I find most business owners do not do this.

How does your business make money? Yes, you may have a product or service that you sell, but there are so many different areas to consider in terms of how you make money. Who are your strongest consumers, and which outlets do you make the most money in? How profitable is your business? You’ve got to understand the financial health of your business.

It’s unfortunate, but finances tend to be where most small business owners tend to fall short. Entrepreneurs are highly creative, and there’s so much we have on the go, and sometimes the numbers part is what we tend to look at last. However, I’m a firm believer that you really need to look at your numbers and understand your numbers on a consistent basis. Understanding your finances allows you to make the right business decisions, know how healthy your business is, and will help you build a business with longevity.

Take time to sit down and add all the numbers. Do not be afraid of the numbers. When you’re afraid of the number, and ignore them, that’s when you get yourself into trouble. Set an annual (yearly) target and break it down into monthly and weekly targets. Depending on how big your business is, you may want to start with monthly, but I really love breaking it down into weekly.

When you do your budget, don’t forget to take account your own basic needs. Some business owners tend to budget solely on their business expenses. That’s great if you have a full-time job and you’re bridging your business. However, if you want your business to sustain you and you want to run it full-time, you really need to take your personal expenses into account.

You also need to also understand your break-even point. Your break-even point is the point where revenue actually starts to cover your expenses. The more money you make on top of that will go into your profitability.

Start tracking the return on all those activities you’re doing. So, if it’s Facebook marketing, your email newsletter– how are those converting? You need to know how much money you’re getting in return for all the money you’re spending to bring in sales.

Taxes are another great thing to consider. A lot of small business owners miss this completely, and I’ve been guilty of this too in the past. What tends to happen is we forget to set money aside for taxes. But once you do your taxes, especially when you start making more profit, you’ll have to pay taxes, and depending on how much profit you made, you may get a big tax bill. If you have not been setting any money aside for it, it will leave you scrambling to get money to pay for the taxes. Furthermore, it will cause you so much stress and energy. It will also take the focus from running your business to worrying about finances. Always set some money aside, especially if you’re making profit to pay for your taxes.

There’s so much I can write about this, and feel it’s so important to the success of your business that I dedicated a whole module in my 4-Week Business Success Bootcamp online program to ‘Know your Numbers’.

I like to say, ‘your numbers tells you a story’.  That story will show you how healthy your business is and areas you need to improve to make it more successful!

 

Uchechi Ezurike-Bosse is a Business & Lifestyle Strategist, Speaker and Writer, but most importantly, a proud Mother and Wife. Uchechi is Founder of My Empowered Living (http://www.myempoweredliving.com) a website aimed at helping women shift their mindset and live their passion! Whether it’s starting and building their dream business, or helping them create a lifestyle they crave, Uchechi is the modern woman’s secret to success! Visit Uchechi at www.myempoweredliving.com to get her FREE online video training series The 4 Keys to your Business Success! This free 4-day business training reveals her 4 key strategies needed to build a profitable and successful business, and how to put them to work in your business!

Sales is Simple Mathematics

Kerry George (1)

The thing to understand about sales is that it is simple mathematics. It is not rocket science. It is not voodoo. It is math. Everyone has a closing ratio and every product has unique selling properties. Once we know what those contingents are then it is simple math.

So what is your product? What demographic is it meant for? Is it something that 35 year old women with two children would love? Or is it meant for retired couples? Who is most likely to buy it?

Sometimes I will ask a marketing client who their target demographic is and they have no clue. They ramble on about how their product is good for everyone. The fact is however, it may be good for a lot of people, but who is it best for? What does your ideal client look like? What factors do they have? Who is most likely to buy the most, or buy it over and over? Who is likely to see the need for it right away without much convincing? That is your ideal target market.

The sales of your product will now boil down to how many times you get it in front of THAT person, because 100 appointments with the wrong people is futile and it will distort the final figures in your math. There is a number of quality people that you need to see in order to sell one. It may be that you need to be in front of four quality potential clients telling your full story to sell one item, it may be that you need your add in front of 10, 000 people to sell one. You may need that add in front of those 10,000 people to get 4 appointments where you get to sell one. You need to know the numbers, and there is only one way to know the numbers. That is by doing it.

We watch shows like “The Dragon’s Den” or “Shark Tank.” What impresses the dragons and the sharks? They want to know the numbers. How many people have you put your product in front of, and then how many did you sell? That shows what the real potential of an item is.

As a sales person who knows their math you now have confidence and confidence can be built upon and improved upon. For instance your industry may supply you with average stats. They may tell you that you need to get your house in front of five qualified buyers to get a sale. However, if you improve your technique and become a better people person with a better closing style you may be able to change those numbers over time to now become a salesperson who sells 1 in 4 or even better than that.

What we see in new businesses sometimes is an owner who does everything themselves but they do not realize that they are a salesperson. They think they make widgets and they don’t want to do the sales, but sales don’t happen unless someone sells something. If an owner doesn’t learn to sell and accept their fate as a salesperson they will end up a statistic of failure. Sales is the only thing that matters because cash flow is king to survival and success.

Even the business owner needs to know their numbers. How many people did they have to see to sell the widget? Now they can train a salesperson with confidence. They know that they themselves with a limited sales ability and in 2 hours work could produce x and that if a dedicated salesperson dedicated themselves for 8 hours a day to the endeavor they should be able to produce x times 4 in a day producing y. In one week multiplying y by 5 they would now know that the salesperson should be able to produce z every week, week after week. Now how many salespeople do you need to reach your ultimate goals?

Marketing is also key to this process. Even good salespeople need to be supported with some marketing tools. There needs to be sales materials in their hands and branded items to work with. There should be some kind of funnel that is bringing in warm leads through networking events and/or online marketing efforts. Somehow those leads need to be pre-qualified to be sure that they fall into the targeted demographics as much as possible. This makes sure that the sales people are getting in front of the right people and it affects the numbers of their success.

Sales is simple mathematics.

 

Kerry George is the owner of the Canadian Imperial Business Network which is currently the largest business network in Alberta and rapidly expanding across the country. She is a serial entrepreneur/author and speaker with a zest for life and a passion to help others succeed in increasing their potential and their bottom line. Kerry has several publications and blogs that you can follow and welcomes most interaction online.

Twitter

@createloyalty2U

@CIBNtweets

@yycbiznetwork

Blogs

http://loyal2u.blogspot.ca/

http://calgarybiz.net/blog-3/

http://kidsincowtown.wordpress.com/

http://loyal2u.ca/category/social-media-2/linkedin/

 

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