At tax time we all become more acutely aware of our finances. 2009 was a very different kind of year. April is a good time to revisit your goals and plans for 2010 based on last year’s actual numbers.
I have an MBA which taught me to understand numbers and finances in business. That doesn’t mean I naturally like numbers. However, I did fall in love with the numbers in my business when I learned how they directly correlate to my marketing plans and the results I achieve.
In a small business or solo business, your professional cashflow requirements are driven by your personal requirements for the year.
Begin with the end in mind — Stephen Covey
It isn’t just a sense of where you are and a dream of where you wish you could get to. It’s a logical progression that you map out and make possible.
With a snapshot of how things unfolded last year and at least a budget for this year, you are in a position to set up systems, plans, and a structure to achieve this year’s goals. This is an important strategic step to stay close to the math in your business, which will give you a plan, control and peace of mind.
For some businesses, income or revenue matters most. That’s the number to track. If your profit or your paycheck is fixed as a percent of revenues (percent of sales) then sales volume is key. So revenue is the number you need to focus on to double your own income.
Once you decide to double your income this year, then you can use that number as a criteria in every decision you make all year, in every goal. When you know your criteria, it makes every sales decision, every marketing decision, and even every expense decision that much easier to make.
Once you decide you will double revenues, then you can make a doubling plan.
If you know what your revenues from last year were and you know you want to double your revenue this year, here are a few steps to get you started:
Set quarterly revenue goals to achieve the yearend goal.
- Use last year’s quarterly sales as a base line
- Calculate the additional sales required/quarter to double this year
- Revise your pricing model and client strategies such as:
- Increase revenues/sale; – not so the client notices, so for new clients who have not bought from you/worked with you before.
- Increase revenues/client in 2010 – expand their use of your offerings
- accelerate revenues/client into 2010 – give them a reason to pay up sooner on a payment plan
- increase lifetime value of each client – offer them an outrageous offer to stay with you for life for a onetime only upfront payment
- Seek out new markets or new channels to expand into
If your goal is to double your income in 2010, that has to be your driving focus in every decision and every action you take. So weekly revenues and year to date revenues become the key performance indicator you track weekly.
Plan your work and work your plan.
