James Schramko says, “if you want to be successful, you need to know your numbers” and that is so true. Knowing your numbers is a crucial part of any business and can give you a valuable insight into what is and isn’t working. As money is involved, knowing your numbers is crucial for the stability of your business. As the business owner it is important to know your costs, check your cashflow, compare value and price and look at your figures.
Read on to learn more about the importance of knowing your numbers in business including:
- Review your ‘forgotten’ expenses
- The 21/20 rule
- Add value to set your business apart from the rest
Review Your ‘Forgotten’ Expenses
Do you know what money is coming into your business and what is going out? Do you know all the subscriptions you have and when they automatically renew?
It is easy to forget about what services and software you are paying for while you are busy running your business, however you may not need some of these services or software anymore.
Remember that you are human and can also fall for a sales pitch on something that does not work for your business. Stay objective and if it is no longer needed, unsubscribe or cancel.
The 21/20 Rule
Marketing consultant Perry Marshall often discusses the 21/20 rule. This is the idea that 20% of what you are selling is making 120% of your profit. He believes that the bottom 20% of what you are selling is being sucked back into the 100% of the profit you are making. However, simply cutting out the bottom 20% is not always the best option. The less profitable options can often make way for bigger sales down the road, so they may be a useful expense. If this is the case, as the business owner you must decide what is best.
Add Value to Set Your Business Apart From the Rest
Many businesses, who have the exact same products as their competitors, will do exceptionally well at selling because they provide value that their competitors don’t. While you should always be focused on making enough profit to make your business worth it, you want to make sure your audience will still choose you.
Think about what you are giving your customers? Being generous with your time can do wonders for your business. If you have the time to do 1-on-1 consultations, they will really add value to your potential clients. Adding value is not lowering your price, it is looking at what you can do for people to set your business apart.
Want to learn more about expenses and your business? Listen to Small Business Talk #103 – 4 Things That Could Save Your Business for more.
Ensure the Money Your Business Spends on Marketing is Making You Money with Cathy Smith at CATCO Enterprises
Cathy Smith has run the same Marketing Agency for more than 19 years and has helped hundreds of business owners achieve their marketing goals. Cathy’s passion and knowledge for digital marketing has helped thousands of businesses reach their dream customers easily online.
To build a new website, increase traffic to your existing website or develop a digital marketing strategy for your business contact Cathy today on 0409 489 464.