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Know Your Numbers..Know Them Well

 

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With the turn of a new year comes time for reflection and optimism for the coming year. For business leaders who depend on selling, no matter how well or how poorly you did in the past – the scoreboard resets to zero. While most of us can figure out generally how much revenue we need in a given year, intimately knowing the full picture of your numbers can be much more of a challenge. That said, the most successful owners tend to think through their business plan figuring out not just the “how” but the “how many.” They not only know their numbers, they understand them - well. 

 

Here are four questions to
access the depth and clarity to your business planning

1.   Create a Complete Business Selling Plan 

Consider the sales forecast
metrics as part of your overall business plan:

- Which products and services
provide the most revenue and/or the highest profit margins?

- What is your Average Price
for each product?

- How many units of each
product do you need to sell in order to achieve your revenue and profit goals?

- What is your projected GSM
(gross sales margin) from sold units?

Excel type spreadsheets or
your CRM software tools are ideal to help you easily manipulate projections

Note the example below…yellow
columns require data entry, white columns auto calculate

projchart

2. Start Fast 

Let’s face it, after a long
grueling year, the inclination is to exhale in the first quarter. The problem
is this often leads to getting behind the eight ball which creates the
conditions for mental errors and unnecessary stress, both of which can jeopardize
success.

In most businesses, historical
revenue trends help predict the level of sales in a given seasonal time of the year. For example, January and February
might prove to be slower sales months for after the holiday rush of November
and December. The trap however is to fully accept these past trends as current
fact and not plan ways to offset their effect. Hence, a potential counter
action for this might be to create a January sales plan targeting new customer
segments that may be more likely to buy during the earlier part of the year. Of
course, this approach can be applied to any period of your fiscal or calendar
year as needed.

There are no trophies given
out at halftime:

 3.   Monitor and Adjust Plan - Monthly, Quarterly and Mid-year Review

Whether on track or not,
always remember that business results are usually measured annually. Peak
performers optimize every day, week, month, and quarter to achieve consistent
high performance. Periodic reviews allow you to evaluate what is happening in
the business and make the necessary adjustments accordingly. But it’s not just
looking at the past, you also want to anticipate potential headwinds and
develop a responsive plan of action. Maybe your largest customer is going
through a management change and their buy patterns are trending lower than
usual. This might be a good time to figure out how you’ll replace the lost
revenue perhaps by making it up with other customers who are in a better
position to buy during that time.

4.   Grow Your Knowledge and Skills 

Today, more than ever, it
seems that we live and work where almost every task is labeled "urgent and
important.” But too often, we fail to prioritize the important,
but not as urgent activities such as
learning and continuous development.

That said, the following
strategies are geared to enable anytime learning (informal self-learning that happens intermittently
during downtime):

Mobile technology
is making it easier to improve skills without sacrificing large amounts of time
from work. One way is to use smartphone learning tools such as apps or any
software that enables you to access pertinent knowledge that helps your
business succeed. Mobile learning can occur in between meetings, sales calls or
even at home while watching your favorite program on TV.

 Practice seems
like an all but forgotten activity...but it’s still one the most effective ways
to improve skill. Although intuitively, we know that practice works, few of us
find the time to actually do it. Make practice a priority by scheduling it into
your day whenever possible while at the same time, repurposing downtime and
smartphone technology into learning moments that can then be drilled
until it is baked into muscle memory. 

 Science has revealed
that businesspeople can learn implicitly through routine work. The
researchers in this linked article: Peter Fadde, Ph.D and Gary Klein make the
case in what they call Action Learning Activities (ALA)
activities which enable you to do just that. The idea is so simple that it’s
brilliant…everyday tasks are repurposed into learning by thinking in a more
intentional way. This form of learning through experience accelerates skill
development helping you reach the next skill level, more quickly.

After applying these
strategies, by this time next year, I’m confident you’ll have had your best
year ever—and of course, you’ll be getting ready to do it all over again in
2019! Yes, just as sure as the sun rises in the east, with every new year in
business—we all end up back at zero.

Godspeed!

  
 
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