Do you know your numbers?
Do you know how many sales appointments you need, in order to reach your new client numbers this month?
If you don’t know these numbers, you probably don’t know your break-even and target-income numbers either? If that’s the case, you have no idea whether you’re making or losing money!
What follows from that is lack of certainty about your pricing, target market and service offerings too. That means unclear marketing which leads to plenty of unqualified sales-appointments that never convert.
By now you can see how one thing leads to another, and how everything can very quickly descend into chaos when you don’t get a handle on it.
And it’s likely if all this is happening in your business, you probably don’t:
- pay yourself a consistent salary
- have a set routine and work hours
- take holidays (or feel guilty when you do)
- know exactly what you’re doing everyday
Sounds overwhelming doesn’t it? I want to take a tea break just writing this!
Tea aside, I’m sure this isn’t how you envisioned things to be when you decided to start your own business?
But the reality is, if you’re random with your business, you’ll get random results. It’s only in planning out your numbers and taking action consistently where you can begin to see predictable results.
And I get why you might be resistant to map out your numbers, I used to avoid it too. I’d say to myself:
- “I just want to do what I’m passionate about”
- “I don’t have the time”
- “I’m not good at math”
- “I don’t want to be so corporate-y“
You see, I didn’t like how my previous companies related to “numbers”. It felt unnatural, like they were trying to put a round peg in a square hole. It was too forced, too myopic, too “cold”.
It created a whole bunch of unnecessary thinking and distracted me from giving 100% attention to every prospect and client. It encouraged nonsensical behaviour too, like taking on unprofitable or ill-fitting projects in order to “hit” your numbers.
I realised the way most businesses approach numbers are backwards. Their short-sightedness prevents them from taking the entire ecosystem into consideration and they end up suffering big-time.
For example, let’s say they want to increase conversion rates. So sales member’s performance are judged by this metric. They’ll probably throw in some kind of incentive to get them motivated to improve this number too.
So the sales guys leave the meeting wondering “how on earth do they expect me to do that?” Since there’s no additional coaching, they continue doing what they’ve always done except now, they go harder on activities they know get people to say “yes” on the spot: they discount their prices, encourage low-commitment, over-promise, exaggerate and include lots of bonuses.
Month end arrives, they “hit” their numbers and drink in the praise and recognition from their seniors. Only problem is refunds, complaints and negative review numbers have all increased. Turns out this initiative actually lost money, even though the behaviour to drive it was rewarded (crazy I know).
I don’t do numbers like this, and neither should you. Over time I’ve learned the optimal way is when you can be flexible enough to “zoom in” and “zoom out” simultaneously. It’s not enough to improve one number, you need to see how it relates to every other area of your business.
And if you’ve read this far, you probably want help with your numbers. If that’s the case and you haven’t already done so, claim your coaching call with me today. We’ll get you super-clear on your numbers and prepare a plan so you know how to turn them into a reality month-on-month (and beyond).