Ignoring these financial indicators could cause serious risk to your business!

There are tell-tale signs in your business that will give you an indication of how you’re tracking. Is business up or down? Are we making money or not?

You’re profit and loss statement is a good place to gather this vital information. Here are some things to watch out for:

  • The obvious one is – tracking your sales. Are they going up or down? Have they flat-lined?
    • Compared to what? Last month? Last quarter or last year? How similar were the conditions in that period? Are you comparing apples with apples?
  • It costs you more each month to deliver your products or service: Track your Cost of Sales. Up down or sideways? Do you know why? Buying too much product or your team not being productive enough could be the cause.
  • Your Gross Profit and Net Profit go down and your fixed expenses go up! Track them using the same method and fix this fast!
  • You only look at the “bottom line” of your P&L report. The numbers look OK but you don’t know how the business is trending. Don’t just track the NUMBER, track the PERCENTAGE of turnover.
    • E.g if you made $500k in Sales (turnover) and a 10% net profit you would have made $50,000.
    • If you made $50,000 Profit on $600k turnover you would have made 8.3% profit. If you watch that % month by month you can see what’s happening to your profitability. Track the % to see if it is going up down or sideways.
  • You take the profit as your unofficial “salary”. If you haven’t formally paid yourself a wage or salary it won’t appear on your P & L, so if your pay comes out of the profit and you take it all, you won’t have anything left for tax or growth or emergencies. Talk to your accountant about this and do a budget.

Learn to love the numbers! They are your friends. They can help you grow your business and they can prevent you from getting into trouble.

5 Practical Tweaks That Make Your Sales Go Through The Roof

It would be nice if sales automatically popped into your business without you having to think about it wouldn’t it? Imagine, money just pouring into your bank account.

Some people will tell you that you can have “passive income” effortlessly and easily without having to do too much at all.

I hate to burst your bubble but if you really want to see your sales go through the roof you’ll need to work at it!

While I do agree that you can set up “passive” systems and adjust your mindset to allow the flow of money into your life and business, there is a lot more you can do than just working on “closing the sale”.

Here are 5 practical things do implement to start getting better sales results:

1. Make sales a strong focus in your business

Making Sales is not incidental to a business – it’s the oil in the machine! Give it due care and consideration. Set sales targets and measure the results you’re getting.

Keep tabs on the number of leads you get, your conversation rate – from prospect to sale and the average amount of your sales on a daily weekly monthly basis.

Assign the responsibility for Sales to a specific person – the buck stops with them. If you have a team who need to also make sales, hold them more accountable to it. Train them if they’re not confident.

2. Have a specific sales process

Most businesses have haphazard sales processes. What’s yours? Do you have a flow chart with every step mapped out and who does what? More sales are lost from inefficient sales systems than possibly anything else.

Do you have a pre-sales system? What do you send a prospective client before they meet you?
(HINT: it should be something that addresses their fears, frustrations, and desires, NOT your company brochure or “all about me” info. Make it about THEM!

What do you do during the sale? What specific steps do you take to surprise and delight your customer? Elegant Selling is like dancing – you both take part.

What happens after the sale is made? Does the client know what to expect next? Do you have a process for happens next?

What happens when you lose the sale? What do you do? Walk away, blame the prospects and never talk to them again? Or do you hang in there and keep the relationship alive? If you really want this client to start a “nurture” sequence to keep them interested, informed and “learning” your way.

3. Stop being busy and go make a sale

It’s so easy NOT to make sales if it’s not your natural strength. You could look and feel very busy with marketing activities; newsletters, Facebook, blogging – there’s plenty to distract you and make you look busy without being effective.

Face to face time with prospective clients is the only sure way of getting an answer and the most effective way of influencing what that answer will be.

Don’t wait for customers to come to you. Look at your diary right now, allocate some time to make phone calls or set up meetings with people who could actually buy from you – no fudging this one: until your sales improve only invest time with people who can actually say “yes”.

4. Get other people to sell for you – affiliate marketing

You can double, triple even 10x your sales by having other people selling for you.

Have affiliate relationships with other business owners who sell a related product. Set it up so that they get a commission on every sale you make to someone they have referred.

This is a highly leveraged way of reaching out to prospective customers who are not in your network or not on your database. You get a nice warm recommendation from a business friend and the referee feels confident that you will look after them.

DON’T make it all about the money – make sure you are giving and getting the best referrals to ideal clients.

Think of the commission you give to the affiliate as marketing dollars well-spent

5. “Don’t change your act, change your audience.”

I first heard this from Lisa Sasevich, whose father was a world famous ventriloquist.

If you’re struggling to make sales in a crowded market place aim higher, not lower.

If you are confident that the product or service you offer could be of benefit to a different set of customers then adjust your prices and start marketing to a more affluent customer.

It might take a bit of courage to make the leap but start by making a list of all the people and organisations you could be doing business with.

Do your homework! Have some conversations with anyone you know in related industries to find out how to approach that market. Take some action, Google them, make some calls, send some letters and go to events to rub shoulders with these new prospective clients.

Selling didn’t come easily and naturally for me until I started to see it differently. It can be a learned skill and you can actually get to like it. I did! In fact, I like it so much I teach it to business owners, particularly in the Professional Services sector like accountants and lawyers.

Elegant Selling

[button_4 size=”large” color=”blue” align=”center” href=”https://s3-us-west-2.amazonaws.com/paulinebright.com/Elegant+Selling.pdf” new_window=”Y”]If you’d like a copy of my Free e-book     “Elegant Selling” CLICK HERE[/button_4]

 

You’ll learn

  1. How to Make More Sales effortlessly and easily
  2. How to write and use Simple Sales Scripts
  3. How to ask Great Questions and give Great Answers
  4. How to handle Objections and feelings of Rejection

3 things that stop you from making more profit and what you can do about it

Profit is a lovely thing!

You can do so much with it; grow your business, hire some great people, buy some new equipment, get ahead of your debts… and lots more besides.

But if profit is a dirty word at your business you might like to think about what you’re thinking about.

Before we even get to the 3 things that stop you from making profit let’s get rid of any negative thinking about it…

The media and “battlers” beat up on banks and big corporate for making “obscene” profits. Do you think it is “obscene” for a business to make a profit? How much is too much? How much would you be comfortable with in your business? Hmmm… is it possible you have a double standard blocking you from making more profit?

Do you actually know how much profit your business makes or do you leave that up to your bookkeeper or accountant to work out for you? You really shouldn’t! If you kept a good eye on your finances, including reading your Profit and Loss statements each month you’d get a better handle on it.

After you’ve cleaned up any negative beliefs and habits around profit you might like to tackle these profit leaks:

1. Giving your customers discounts even when they don’t ask for it.

Discounting your prices to make a sale will severely erode your profit. If you offer discounts, understand why you have a discount policy and how it fits with the pricing structure of your business. Giving discounts based on your “mark-up” will be killing your profit but, if you must discount, the price should be worked out on your “margin”.

Download the Mark-up vs Margin Fact sheet here

2. Letting your team get away with murder; killing your business with unproductivity

If you’re the kind of business owner who “likes to be liked” you may not be holding your team to the high standards you would really prefer for the business. You don’t have to be a grumpy tyrant to get the best from your team, but you do need to set some expectations and have a way of measuring performance. You may need to set some KPI’s.

If you’ve employed people to work for you, hold them more tightly accountable to their role. Sales people should have strategies and targets and be able to proudly report their weekly and monthly progress to you. Admin people should be able to prove their effectiveness. Marketing people should be bringing you high quality leads.

The Production Team; people who deliver services like accountants, technicians and trades people are billed for their time. Make sure you track their billable hours, track “write-offs” and Work in Progress (WIP) to make sure you are getting good value from your employees.

Train, motivate and reward the good ones, increase productivity and consider moving the poor performers out.

3. Getting side-tracked or bored

Distraction and disillusionment will have an increasing negative impact on the bottom line.

As a business owner it is your responsibility to lead your business. You’ll need clarity of direction and strategies to get there. When was the last time you dusted off your business plan? When was the last time you shared it with the team so they know where the business is headed and how their role fits with that? Have you got a Business Plan or is it time for an update?

Identify your best profit making activities in your plan then work your plan daily. If your plan doesn’t drive you and keep you interested and excited then it’s probably the wrong plan for you. Or you might have taken on the role of general dogsbody and trouble-shooter. You’re wearing too many hats! Work out what you’re good at, what the most profitable use of your time is and do that.

A really good plan will help you lean towards the outcomes you want and attract the things that are going to be of most benefit to your business. If you feel yourself getting distracted, go back to the plan, put daily activities in your diary that are consistent with the plan and be disciplined in your approach to getting tasks done.

5 Money Making Strategies Even If You Think You’re No Good At Numbers

Before you do anything to do with money you may need to change your mindset and language about money. Start talking about money in the positive and drop the negative thoughts and feelings and words you use about money.

Stop telling yourself you’re no good at money and numbers and start telling yourself you’re on the way to learning more about money and numbers.

Then employ these 5 money making strategies to help you make more money.

1. Multiple transactions

If you say “Thank you and goodbye” to your customers after a transaction you may be losing one of the best opportunities to help your customers get more of what they really want – and put money in your bank.

Say “thank you and hello – invite your customers to join your community of happy clients so you can keep in touch with them.

2. Sell what makes money

If you have a range of products or services at different price points, think about this: top sales people will tell you that it often takes about the same amount of time and effort to sell one BIG thing than one small thing, provided you are speaking to the right customer. And if they want the small things why not bundle them together to make a big sale – think “upsell”. You won’t know unless you offer.

You might be spending too much time attracting small clients instead of going after the bigger clients. “Any sale is a sale” while technically correct, could be eating into your profits by not selling high profit items or discounting to get the sale.

Think bigger – around 20% of your customers would buy a higher priced item from you if you

a) had one

b) offered it to them.

Make sure you cultivate the top 20% of customers who love you and will buy your big ticket items.

3. Invest in assets

If you’re going to reinvest money back into your business DON’T “pimp your ride” buying pretty things or high tech things UNLESS they have the ability to make you more money.

Invest in people who can bring in more sales, technology to make it easier to collect money, systems that create more flow so things run faster and smoother and programs that identify the money you are leaving on the table so you can scoop it up.

4. Sell your ideas

If you sell tangible products or time for money services you could be missing out on leveraged money or even “money while you sleep”.

You probably know lots of things other people don’t know. It’s likely they would be happy for you to teach it to them either 1 to 1, in a group or an online automated program. Have you considered information products? E-books, e-classes, video programs, membership programs are easier than ever before to set up and run at minimal cost.

Use blogs, social media, email marketing and strategic partners to market and sell your ideas

5. Set money goals

Decide on the ACTUAL amount of money you want then get to work with a piece of paper or a spreadsheet to work out how you will achieve it. OR use the Income Generator Calculator tool.

For example your money goal might be an extra $100,000 in the next 90 Days.

Break the goal down into manageable chunks – if you sell a service, how many days will you be working in the next 90 days to sell and deliver that service. Let’s call it 44 working days to allow other days for running your business and days off.

Do the numbers
100000/44 = $2272.73 per day is your target.

The next question is HOW? How can you make that much money each day for 44 days?

Get creative – work out how many sales you’d need to generate to achieve the target then get to work structuring, marketing and selling to reach your goal.

What’s the difference between working IN and working ON the business?

As a business owner you wear a lot of hats. Some of them fit better than others, and some of them should not even be on your hat rack!

It’s a tricky question the ON and the IN because the lines are often blurred.

Take Finance

In a small business you might wear the Financial Manager hat. It doesn’t mean that you do everything, but you’re responsible for it. The buck stops with you.

Working IN the business as the Financial Manager your roles might be to do the bookkeeping, manage accounts payable and receivable, manage payroll, tax compliance etc. That would be working IN your business. It’s in your job description.

But “Financial Manager” takes on a different meaning when you talk about working ON the business. In this case you would be doing very different things like:

  • Being accountable for the financial performance of your business – even if you are the boss!
  • Analysing data to get the facts about your business performance before you make decisions.
  • Setting sales budgets and working out how you and your team will achieve them.
  • Setting the overall financial goals for the business and scheduling monthly meetings with the team to monitor strategies and outcomes.
  • Reading your scorecard weekly and monthly to find out if you’re on track and making timely course corrections if you’re not.

What about Production?

Working IN the Production area of your business you might be the one serving the customers, doing the technical work or making “widgets”.

Working ON the Production area you’d typically be:

  • Liaising with Finance to make sure the products and services are profitable.
  • Training the team in technical skills and customer service skills so you do less and they do more which in turn frees up more of your time to work ON the business.
  • Working on innovating and developing your products and services to separate you from the competition and meet customer demands.
  • Finding new technology to help you produce what you do more efficiently.
  • Talking to your customers to find out what they want.

Get the idea?

Now it’s your turn.

Describe all the hats you wear.

Make an IN and ON list for each one.

Look at the list and decide which are the most important, enjoyable and enriching tasks for you. Then take the working ON tasks and make them part of your job description. Make sure you schedule the tasks to do them regularly.

You won’t be good at everything. You don’t have to be. Do your most profitable “working ON the business” growth tasks and hire other people to fill the gaps.