A plethora of new small business owners believe they can turn a profit in 30 days, 90 days or the first year of business. To be honest, companies such as; Twitter has not turned a profit yet and Ashley Stewart took twenty years to turn one. I am not writing this blog post to diminish your goals of being a successful small business owner. It is truly possible to do so, but we must first be realistic when it comes to this. Today, I wanted to provide some real insight on increasing your small business chance of becoming profitable this year.
Profit Is A Numbers Game
As a small business owner, you should know your companies income, expenses, and more. Tracking all of this information happens in your bookkeeping or accounting software you are utilizing, unless you’re completely old school with a ledger. If you’re spending more than you’re earning there is no profit and that’s where a high number of business owners are. They believe their investing money into things that bring a return on investment but it’s draining a hole in their pocket. This is why I believe before launching you save as much money as possible this will help ease startup cost. One of the first things you need to do is break down your monthly, quarterly and yearly expenses. See where your money is going and is it benefit you. Yes, I believe in outsourcing things such as social media, website design, graphic design and more but that will eat up your profit margin. You can spend an hour a week scheduling your own social media post.
Know What You Want To Make
How much money do you want your business to make this year? I have a series on how to make $35,000, $50,000, $75,000 and $100,000 in sales yearly. So many people want to increase their companies profitable this year, but they lack a goal of how much they want to do in sales. If you want to make $75,000 this year in revenue, but you end up spending $65,000 in expenses profit is far and few. Decreasing your expense is a huge part of increasing profit margin. I know an amazing women business owner who made $11,000 last month and had $900 in expenses. Her expenses depend on sales also because she has affiliate fees, banking fees and more. The more she makes the more her fees are. However, if for the year she did $132,000 in sales, $10,800 in expenses and then take out 30% of taxes which is $39,600 she will take home around $81,600 that does not including living expenses. You see there are always a lot of hands in the pot from housing, student loans, insurances, cars, living and more. Her living expenses might amount to $30,000 a year bring her take home for the year now to $51,600. Yes, that is a great number, but what is her original goal.
Know Your Sales Funnel
Your sales funnel has a huge impact on increasing your profitable this year. Earlier this month, I shared The Five Elements Of A Creative Small Business Sales Funnel that broke down information needed to succeed. Once again, too many people are not sitting down do the mundane things such as; sale funnels, business plans or modules they rather focus on the fun things. I totally get, because I was once that person but the behind things that make my company work are more interesting nowadays. Establishing a well-oiled sales funnel will keep customers coming in even in the slow months. When you’re doing your sales funnel think about how you can introduce the tiered pricing. Many times clients of mine will mention how people are not buying any more. They only had one option on their site and the customers have been one and done. You want a customer shopping with you on average 4-6 times a year. That means constantly introducing new products for them to shop or marking down products. As a service company that is having new courses, classes, workshops or specials for the season.
Your Customer Demographic
Who are you gosh darn customers, people? That is a huge question that most people once again never sit down and ask themselves. Most social media platforms are giving you the data you need to market to the right people. In general, most people are their target audience. They are wanting to solve a problem not only they have but others do too. My consulting business is based on this principle. I am the resource I wish I had when first starting my online boutique. Stop for a moment to really analyze your spending trends. When you shop a store how did the marketing make you? Pay attention to the things that make you stop and think. Emotion tends to trigger sales in most demographics. How can you appeal to your customer demographic through a medium such as; Twitter, Facebook, Instagram, Youtube or email marketing.
Create Realistic Goals
Each month you should have goals you are working on to achieve your big year in goal. Those goals should also be broken down into quarters. The most important aspect is keeping them real not unachievable. Yes, we should have goals that stretch us, but they should also be unattainable. Too many small business owners give up on their dreams when they do not hit a certain goal. Take the time to revisit your goals and pivot if necessary. Every day, you should take a bold action that helps you move closer to achieving your goal of becoming profitable this year.
Marketing Your Business
One tweet a day is not going to turn your company into a high six figure company. Consistency kills and content is the queen of the throne in a digital world. A long time ago, I believed you had to be on every platform to reach everyone, but once again it goes back to your customer demographic. In addition, to finding the golden key that brings you a return on your investment. Newsletters are my golden key that does that for me. Once a month, I am providing my subscribers exclusive content that help benefit their business. In turn, it builds my expertise in the community. One thing, that I have been doing for Business Bestie is doing a Twitter Chat once a week. This is helping the company get out there. You have to invest the time in the free platforms or you need to invest the dollars behind them.
Increasing your small business chances of becoming profitable this year, takes a plethora of work. All the dots need to connect with each other for you to achieve your goals. You have to be focused on all aspects which can be