The best way to identify your Next Vital Need (what to fix next) is to take the assessment. And if the assessment tells you that you need to fix your sales, read on!
Unpredictable sales are frustrating, especially when that rollercoaster cycle leads to unpredictable profits. After all, operations expenses are usually relatively stable. So when you’re not bringing in enough revenue to cover expenses (after your profit and owner’s pay allocations, of course), you blame sales.
That’s a fair assumption. But there’s more to establishing predictable sales than simply making sales month over month.
If you feel like you’re experiencing a challenge with your sales or you’re finding that you just don’t seem to have much left in your OPEX account each month, it’s time to “fix” that sales challenge.
But again, it’s not about making more sales. It’s about making the right sales from the right people so that you can live the lifestyle you want.
Being able to support yourself and your family is important, right? We’re all for paying yourself a living wage, but do you know what that looks like for you? It looks different for everyone depending on where you live and what lifestyle you want to maintain. Figure out how much you need to live comfortably while also eliminating debt and putting some cash away for savings. Then reverse engineer the numbers to determine what you’ll need in sales to make that happen. Consistently.
Of course, more sales isn’t necessarily the answer if you’re not selling enough to take home what you want. There are a lot of factors to consider here, including reducing expenses. And when you’re looking at your numbers on a regular basis, you can easily calculate exactly how much you need to make in sales in order to fund your owner’s pay account appropriately.
You’ve likely heard of the ideal client and the importance of knowing who that is. Once you know who that person is, are you doing the things you need to do, in the right places, to get them interested in your services?
It’s not enough to advertise or create content for your audience. You need to show up in the places where your ideal clients show up so you can provide value and grab their attention. That means being an active participant, like guesting on podcasts your people listen to or commenting on social media content, responding to your subscribers’ emails, etc. And not just half-hazardly either, but with intention and in the places where you know your “right people” are hanging out. You don’t need just anyone to join your gym or visit your studio; you need the right people to do that.
Once you attract the right people, you need to convert them into customers–and repeat customers if that’s your business model. It’s not about making the sale at any expense; it’s about selling with integrity to the right customers.
It’s not your responsibility to be the hero of your customers’ challenges; it’s your job to make them the hero and guide them along the way. This allows you to focus on the potential customer, not on making the sale–thereby eliminating the pressure on you or your salesperson to make the sale. After all, you may not be the best solution for everyone. And wouldn’t you rather convert the people for whom you are the best solution?
No one likes to feel let down, and sometimes clients aren’t happy–but they won’t tell you that. There are a lot of reasons why you may not deliver on the promises you gave during the sales process, not the least of which being overextending yourself (which we often do in an effort to make more sales).
Depending on your business model, the goal should be to delight your customers so they’ll continue buying from you. If they’re not happy they will likely take their business elsewhere. But the reality is that it’s much easier to retain a customer you already have than it is to find a new customer.
A sale isn’t really final until both sides have delivered on their promises, and sometimes a sale remains incomplete indefinitely. This includes the client paying in full for the delivered product or service. You’re a business, not a charity, and clients need to fulfill their obligations to you.
If your business is a retainer model, you’ll notice that some clients will pay later and later as time goes on if they’re not on an auto-pay system. And if you don’t have a delinquent collection system in place, you’ll want to get something set up.
Looking at your own business from a different perspective can be difficult. If you’re struggling to determine where your sales breakdown is, let’s talk! We have experience helping clients like you get on the right sales path so they can live the lifestyle they want. Contact us today!
You are committed to the success of your business. Your business’s health and wellness allow you to live a full life, make your mark on the world, and help support the lives of your clients and team. You spend so much time taking care of the things and people who keep your business running, you forgot to financially support one of the most critical pieces of the puzzle—you!
The reality is that paying yourself a living wage is about MUCH more than dollars and cents. Creating a living wage for yourself (and paying it) reflects how you feel about yourself as an individual and business owner. Becoming aware of your money mindset and how it holds you and your business back is a crucial step towards your financial health, success, and freedom.
But do you know how to determine the right living wage for you? It’s important to examine why you’re waiting to pay yourself the big bucks and how to assess where you are now to create a brighter future.
The first step to finding out how much money you need to make a living is to know what a living wage actually is. We’re not talking Ramen noodle living; we’re talking about normal everyday living. Spend some time thinking about what living really means to you and how much you need to finance it.
Ultimately, your pay is about more than numbers and spreadsheets. Mindset shifts around determining your owner’s pay can bring up feelings of guilt and even unworthiness. Depersonalizing your salary is a great way to sidestep any residual emotional issues around money. Determine what you feel is a fair wage for someone else, and pay yourself at least that much—minimum!
Do you want to work in your business for the rest of your life? If you are like most business owners, the answer is probably no. But if you’re not paying yourself a livable wage to do your job, how will you ever be able to hire someone to replace you in the future?
Check out our blog to learn more about how to determine your Profit First owner’s pay allocation.
As a mature business owner, you might be waiting to pay yourself until you can sell your business for the perfect ROI. The truth is many entrepreneurs who have waited for the pot of gold at the end of the rainbow never see their payoff.
Living for what might happen in the future compromises your quality of life in the present. Putting Profit First in your business today helps you gain more financial clarity to help you reach future goals.
Fast forward to when you have your Profit First strategy in place. Your business fully supports your desired lifestyle, but you have “extra” money. Your first instinct might be to leave the surplus (the profit) in the business, but the best option is to pass the extra into your personal rainy day fund.
Transferring half of your business profits to your personal accounts on a quarterly basis and essentially paying yourself creates benefits to the owner. Moving your money out of the business and into your personal account creates a buffer if your business gets sued.
Additionally, the act of transferring your money into a personal account has the potential to make you more money in the future if you do decide to sell. On paper, a large portion of the financial value of your business is determined by the amount you have paid to yourself as the business owner. Typically, sellers can determine the sellable value of their companies by doubling or tripling the amount of income they received as the business owner.
By implementing Profit First and adjusting your money mindset in the short term, you are increasing the value of your business in the long term—and improving your quality of life!
If you’re ready to implement Profit First but aren’t sure where to start, reach out.
We’re happy to help.