Empower Your Business

Accounting is Just the Beginning

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Part 2 – Four Vital Things You Need To Know about Your Business

Last week I shared four of my eight vital things you need to know about business each and every month, here are the final four:

Rolling 12 Months Turnover. It’s no good keeping an eye on your monthly or weekly sales and comparing these with last year or the year before, nor your sales for the year to date, you need to monitor your sales over the last 12 months (or 52 weeks if you prefer) and compare with the previous year. Not only does this prevent you getting depressed in your down season when it’s easy to forget just how poor trade can be, but in addition, it irons out the seasonal kinks in your turnover and provides you with the real picture of how your business is tracking.

Your Sales Pipeline or the Number of Prospective Customers Thinking About Becoming Customers. No matter how busy you are, you still need to be thinking about next month’s, the next quarter’s or next year’s business and where it’s going to come from. Now some of my clients just get one-off jobs and it’s vital if you’re like them to think at least six months ahead about how you’re going to keep your sales pipeline topped-up. To find out more about your sales pipeline click here.

But even if most of your business comes from the same customers or clients you need to be marketing constantly seeking out either new customers or making sure your existing ones come back again and again. Customers move away, go elsewhere, die, lose interest or their job or just stop buying from you.

Consequently, you need to be monitoring either your sales pipeline and/or the number of prospective customers thinking about becoming customers at least monthly. Let’s face it, you’d be nuts not to record all enquiries or the details of all prospects in any case so you can follow them up until, as Winston Marsh (that famous Aussie business guru) would say, they buy or die! 

The Source of All Your Leads/Prospective and New Customers. This really is a “no-brainer” as it’s so obvious, but just in case I’ll spell it out for anyone who’s new to business. Firstly, you need to be able to thank and recognise or reward the referrer if they’ve been referred to your business. Referrals are your life blood, they are like water in the desert and not to be taken for granted. A hand-written thank you card and a small personalised gift should be built into your routine.

Secondly, you need to know to determine which areas of your marketing are working and which are not. I meet many business owners who spend $25,000 or more a year on advertising but have absolutely no idea whether it’s working or not, using the same old adverts they’ve used for years. For example, for a client of mine my analysis of their lead sources looked like this:

Referrals 68%
Walk-By/Local Knowledge 12%
Internet 9%
Advertising 7%
Other Marketing 4%

Armed with this information, where would you focus your marketing efforts?

Prospect Conversion Rate. OK, you’ve put a lot of time into marketing and it’s paid off. You are getting loads and loads of leads and enquiries so now all you have to do is to convert them into customers. Just how successful are you are doing this? Do you use scripts, depending upon whether it’s on the telephone or face-to-face? Do you have a template presentation you adapt for different prospects? Is your standard quote boring with just the bare facts and a price or a marketing-focused Action Plan with your USP, benefits, guarantee and testimonials?

To be able to improve you need to know how well you are doing now, so work out in percentage terms your success rate. Mine is consistently over 90% – what’s yours?