Every Business Woman wants to make more money this year than last year. It doesn’t matter if the business is a year old or 20 years old, the entrepreneur/owner decides to achieve a new high for annual revenues. When asked, “What information are you basing your new revenue goal on?” the answer I hear is something like, “I just added 10%.”
Well, listen up ladies, if raising the bar were that easy every entrepreneur would have a successful business and unfortunately that just isn’t the case. Getting your customers to part with 10% more of their money than they did last year may not be as simple as you think.
(1) Analyse Financial Data From Previous Year
By now you should have your financial data from last year completed by your bookkeeper, accountant, or done by yourself on something like QuickBooks or even a simple excel spreadsheet. If you are a seasonal business you will immediately see that in certain months your revenues are high and in others low. If you aren’t a seasonal business and you see this trend, ask yourself why? Break down the year into quarters, months and even weeks if necessary. Depending on your business looking at specific chunks of time when revenues are acquired will provide you the information you need to create revenue goals moving forward. This exercise will give you a lot of information about the ebb and flow of your business. It is particularly critical detail if you are in an inventory business as it allows you to see when and how much inventory you should plan for. Women entrepreneurs who are afraid of the financial details must set aside their fear and focus on the power of knowing when revenues are high and when they falter. This is the only way an entrepreneur can grow a business financially. And, it is the only way to know that raising the revenue goals is achievable.
(2) Analyse Customer Data From Previous Year
As a coach, I ask my clients at every visit about how many new customers they have on-boarded, served or sold to. Why? Because new customers tell you that whatever marketing you are doing is working and/or that referrals are coming your way. My clients make sure to ask each new customer where they heard about the business so they have an idea as to exactly how the customer came to them. Are you doing this? Do you know who is buying from you? If the answer is NO you have a problem with setting achievable goals as you are already flying by the seat of your pants.
Your customer data should tell you exactly who bought what, when and why. This is the only way you will know who you can expand your product/service for and guestimate a result. Yes, when I had my newspaper business I knew exactly who my customers would be long before they bought from me. Every entrepreneur must know the need in the marketplace for their product/service and how to connect the product/service with the customer who wants/needs it. When you have the ability to analyse your customer data you have the ability to raise the bar on how much your customers will spend with you. The savvy entrepreneur knows exactly what, when, and why her customers call or come in to buy and she plants the seeds for new customer acquisition from this data.
(3) Analyse Product/Service Data – What Sells What Doesn’t?
If you sell products then you have inventory data. If you sell service than perhaps you don’t – but you should! Every entrepreneur must know at all times which products and/or services are selling and which aren’t. All businesses would be successful if everything the business sold was bought by every customer, but this is just not the case. For example, some boutiques are very successful at selling clothes where others succeed at selling accessories. Finding your business niche is the most important task for every entrepreneur. Just as some service businesses are very successful at selling consulting services where others succeed better in selling programs. The good news is that there is room for both but as a business owner it is critical for you to know exactly which products and/or services are your cash cows and which are your losers and why. In order, to increase your revenue goals for the upcoming year the losers must be moulded into winners or scrapped. Even the cash cows may need a little updating depending on your business, but knowledge of your winning products and/or services gives you more power to succeed.
(4) Set Revenue Goal
You’ve done the work and learned the answer to when, why, and how last year’s revenues were earned. It is time to raise the bar for the upcoming year and set new revenue goals. Again, depending on your business the answer to this is different, however if you now know that your revenues increased last year due to new customers than you know whatever marketing or referral program you have in place is working. Keep it going! You also know which customers want more of what you offer and are willing to pay you and your business for it. Take this information as a big YES! If you offer product(s) in your business than you now have an idea as to what products are selling. And, if you sell services you are now aware of the services that sell well. Contact your customers and let them know by phone, email, newsletter, Facebook or direct mail – in whatever way they have asked you to connect with them – that you are now offering X+10%. In doing this you are raising your revenue bar by 10%. Or, in a different business scenario, connect with your customers and let them know that last year’s offerings are theirs for 10% less as a loyalty appreciation and that you are expanding your business offerings and expanding your product/service line that will benefit their organization even more. Watch how giving your customers 10% off, insures you an increase in revenues because of your expansion for your loyal customers.
The plan is to keep your current customers happy and bring them back by showing them appreciation for their business while at the same time allowing them to purchase more from you as a valued and respected vendor.
If you find that during your analysis that new customers have been flocking to your door take the time to find out why and use this data to continue to love in attracting new customers. You may just find that with an increase of your customer base of 10% – 30% of new customers you will be able to set your revenue goals well beyond the 10% most companies yearn for. Never underestimate the importance of good data it will always lift all boats.
Finally, set an achievable revenue goal for the year ahead and make sure everyone in your organization is on board with the decision and understands how you came to it. Financial transparency is critical if you want to raise the bar and everyone in your organization MUST be ready for the challenge. Now, Go Out and Just Do It!
Nyaradzo Viki-Mavindidze, Managing Consultant of Avodah Consultants, is a renowned Speaker, Training Consultant, Coach, Author, Entrepreneur, and Philanthropist. A psychologist by profession, she is passionate about helping people improve and excel in their lives holistically, shifting personal paradigms and beliefs through training. Over the years, she has developed herself as a brand to reckon with in dissemination lasting solutions to performance deficiencies.
QueenMakers is an initiative she founded that pursues proactive strategies to develop and empower women and girls to take on leadership roles in their communities through; training, mentoring, capacity building and coaching. She believes that the full and active participation of women in economic activities and decision-making is a pre-requisite for positive change and development in Zimbabwe and in Africa.