In January, most people set goals for the year, and, whether personal or business, often by March, those goals are forgotten. By the middle of the year, they are nothing but a distant memory. We want to help you not only remember those goals but also track their effectiveness. Here are five things that you can do to ensure that your business goals are on the right track.
- Review Sales History
The reason you want to review your sales history is to make sure that you are hitting your sales goals for your business or different product categories. When reviewing your sales history for your business, you want to review at least the last three months. Things you should be looking for are areas in which you are excelling and areas in which you are falling short in sales. This can help you to find your problem areas and determine what changes need to be made if any. This can also help you to identify trends in your sales that could be causing you to miss your goals.
- Review Expenses
Reviewing your expenses is an important part of determining whether or not you are meeting your financial goals and pinpointing problem areas. You are going to want to review your expenses going back at least three months. This will help you to find what expenses are costing you the most, what expenses can be decreased or cut, and what expenses are solid or necessary. One thing to look closely at is if you are paying for multiple applications or programs that are similar and can accomplish the same thing. If so, determine which program works best for you and then you can eliminate the extra expense of the other program.
- Calculate ROI on Advertising/Marketing Expenditure
If your business utilizes a marketing company to help advertise or you are paying for advertising at a local business, in a local paper, on a billboard, etc., then this would be a great time to calculate if these expenses are worth the money that you have been paying for them. In other words, are you seeing a positive Return On Investment? To do this, take the price of the investment or advertising and subtract it from the estimated profits gained by the investment. Then divide this the price of the investment and multiply by 100 to get your ROI percentage.
Ad on billboard: $100/month for 6 months
Estimated Profits: $3,000 for 6 months
$3,000 – $600 = $2,400
$2,400 / $600 = 4
4 x 100 = 400% ROI
- Review Net Income and Owner’s Pay
You should also take the time to review your net income and owner’s pay for the first half of the year. This will help you to determine if you are on the right track for your goals, have already met them, or if you need to adjust your goals for the second half of the business year. When adjusting your goals for the rest of the year, you should adjust to cover any missed goals, as well as a 5% margin for possible errors. This will help you to meet your year-end goals for your business.
- Sign up for a Profitability Analysis
Contact Lydia, our in-house Profit First Professional, to arrange for a Profit Analysis to help you determine where your problem areas are and how to grow your business. Let us help you get your business on the path to profitability.