We all want to set big goals, think big, move forward, and grow our businesses. We all want to be profitable… that’s why we do what we do. We all talk a lot about working on the mental piece to sales: visualizing our goals, adjusting our expectations, authentic sales conversations, deliberate goal setting and so forth are all crucial in sales and business ownership.
But at the end of the day, the month, or year, how can you tell how much you’ve grown in your business? What is your determining factor of growth? Do you count the number of closed sales you had? Do you look at your take home income? Or do you prefer to measure your personal growth – how you feel about your sales skills, or how you’ve met certain personal goals as you work your business?
How do you measure your growth?
Furthermore, how do you know for sure that you’ve actually HAD growth?
I submit to you that there is only one way to truly know how much growth your business has had. Growth must be measured completely objectively: with the numbers.
In talking with many entrepreneurs over the years, I have found that most of them don’t fully understand their unique numbers. Because they don’t know their numbers, they can’t possibly know what it would take for them to grow their business. They don’t have a starting point from which to base their goals or set projections.
Not everyone considers themselves a “numbers person,” particularly those in sales who consider themselves to be more “right-brained” than “left-brained”. To those that aren’t particularly fond of math, numbers can feel tedious, time consuming, and confusing. Sometimes, number crunching and analysis can feel downright depressing. But it’s necessary for, goal setting, business planning, and of course, growth.
How can you possibly know what goals to set if you don’t even know where you currently stand?
In sales and in business, it’s critical to know your numbers. Here are some basic steps to get you started.
1.) Break down your business numbers.
What are your business expenses?
What are your costs of sales?
What is your business income?
What are your profit margins?
What are your products or services priced at?
What do you pay in taxes?
Make sure you’ve accounted for everything.
2.) Make projections. Once you’ve accounted for everything, and you know exactly where you currently stand, only then can you make projections for the growth of your business and sales. You can begin to get serious about balancing your working budget and setting goals.
Once you start understanding your unique numbers in your business, you will start to creatively find ways that you can scale back, rearrange business priorities, and become more profitable just by taking a bird’s eye view of your business figures- completely objectively.
3.) Reverse engineer a marketing plan based on your projections. You can formulate a specific marketing plan, budget, and form projections based on actual, real life numbers that show exactly what is happening in real time within your business.
4.) Track your activity. How many sales meetings do you need to set up? What’s your close rate? What are your goals? Most importantly, how is your follow through with the plan you made?
And you track the numbers from there again, and again, and again.
At the end of the day, numbers tell us everything we need to know about where we are, where we are projected to go, and what specific goals we need to set. If you want to grow, you must know what you’re growing from! And fear not, because as your business expands, working the numbers becomes increasingly exciting as the figures you work with get larger!
Plan your work and work your plan – but make sure you do it with actual figures that can be tracked, analyzed, managed, and easily accessed. You owe it to yourself and your business to fully understand the numbers.