In Business, do you…
- Work excessively long hours?
- Get paid less than the people who work for you… or not at all?
- Lie awake at night wondering how you can pay wages… or your suppliers?
- Have a cash flow problem?
- Get little financial return from your business despite the effort, commitment and investment?
I bet these have been your experience from time to time.
Let me ask you this
Have you set goals related to your business earning more turnover or profit? Now there’s nothing wrong with these kind of goals because like it or not, we are all in business to make money. However, in our experience you may be wasting your time.
Let’s explore why!!
Most business owners set their financial goals by looking at the previous year’s results and targeting an extra percentage increase in turnover (usually between 10 and 20%). At the end of the year they are either happy or not happy with what profit they make.
It’s pretty black and white, but here’s the thing…
- Working from the previous year’s financial result to predict the next year’s income and expenses limits your growth potential.
- The practice of adding a further 10% to expenses and setting the goal of increasing your income doesn’t work. Why? Firstly because your focus is on the outcome (money) NOT the reason why you want to make more money.
- Developing a budget to find out whether you can put excess into savings or eliminating debt is putting the cart before the horse.
- While we agree it’s important to review your expenses to see where they can be cut, cutting expenses is never a sustainable way to grow your business.
- In our experience the areas that business owners cut in their business when things get tight are training/education, marketing and eliminating team members. Sometimes these areas are the most vital to ensure the growth of your business continues
We help you by taking you through a process of discovery which includes the following:-
- Identify why you want to make a profit – your lifestyle. How much do you need?
- From the previous financial years we work out your fixed expenses.
- We do projections to figure out your gross profit figure.
- We brainstorm with you to find ways to reduce your cost of sales percentage.
- Using the previous information we calculate what your turnover for the next year will need to be.
- We reverse engineer how many products or services it will take to achieve your projected turnover.
- By reverse engineering your conversion rate we discover how many leads are needed
- We teach you the most efficient way to track the numbers. Remember; you can’t manage what you can’t measure.
Why does it work
This works primarily because your focus shifts to your goal (your why).
Secondly, your Number of new traffic, conversion rate, number of jobs, average $ sale, turnover, cost of sale and fixed expense targets become how you achieve it.
I don’t know about you but if I can work out how many more customers I need to achieve my profit targets, it makes running my business so much simpler. That’s why traditional turnover or profit goal targets do not work
Meet our Wealth Coach
Vicki Jarvela is a successful business owner with a core focus on helping you maximize profit, generate discretionary cash and overall grow your earning potential. She ensures clients achieve this by developing new revenue and net profit target strategies, monitoring and tracking income and expenditure, and using Business Impactor Scores to drive better business improvement decisions.
As Kaibizzen’s Wealth Mentor, Vicki works with clients to:
- Identify, track & analyse Business Impactor Scores to guide business improvement decisions;
- Develop strategies to achieve revenue and net profit targets;
- Monitor cash position and track income and expenditure.
Vicki brings with her six years of business ownership and an intimate knowledge of the Kaibizzen coaching process as a former Kaibizzen client.
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