Know Your Numbers: Financial Goals for Entrepreneurial Success
It may seem like an invasive question at first, “How much money do you make?”
However, a good marketing strategist and business owner should know exactly what their current situation is and their goal. The reason isn’t to be intrusive, however, you may be surprised to learn just how many businesses fail to know what their actual income or profitability is. However, everyone that we speak to has the same general goal…to increase income.
Plain and simple, you need to know your numbers in order to do so.
The Numbers You Need To Always Know
First things first, let’s break down the exact numbers you need to know on the top of your head, and no it’s not just ROI.
You need to evaluate your income in order to increase it. As such, you should know:
- How much money do you make?
- Where do you make the most money?
These two numbers alone will define where you should go in terms of marketing your business. It’s that simple to start creating success.
Now that you know your numbers, what’s next?
Calculate Your Current Net Profit
It’s true that net profit can fluctuate substantially. However, there is one more number you should know or estimate at the very least, “How much goes in your bank account at the end of the month?”
Many businesses are focused on a month-to-month basis; they’re basically strapped for cash—especially smaller businesses. When you can’t forecast what your business revenues will be, you can’t accurately forecast what your expenses should be or what you will take home. It’s a rat race you’ll never win.
In order to increase your income, you need to be able to create consistent, predictable, reliable income month after month, year after year. This is the amount that you use personally, that contributes to your lifestyle not just the longevity of your business.
Set a Goal for Your Net Profit
It’s not uncommon for people to say that they started a business because they wanted to do what they loved and that they didn’t really think about building any real equity. However, if you don’t start thinking that way, then you are not building a real, potentially saleable, business or practice.
Visualize what your ideal lifestyle would look like. Be specific about what it is that you want. If you want a car, visualize the make, model, color, and any custom add-ons you want.
If you want a vacation, visualize the location, activities, number of people accompanying you, and the weather. Maybe you want to go to the Bahamas with your wife and two kids, spending time on the beach on a sunny day. Whatever it is, be specific when you imagine what you want.
Next, think about how much these things will cost. Once you have a good estimate, you can then work backward and determine how much money you want or need to make.
Identify the Gap Towards Increasing Income
When we often do the entire exercise, we have noticed that often there is a noticeable gap between how much people want to make and what they are making.
If you are nodding in agreement, it’s your responsibility to find out why you are not earning that. Now this reasoning can be attributed to a number of things including working too much in the business vs. on it, could be a staffing issue (under-staffed or not the right staff), or a lack of marketing or advertising, or a lack of capital to get the business off the ground. There are a number of reasons why a gap in income may exist.
Part of what we do at invigoMEDIA is work with our clients to close this gap, to increase income for our clients.
Many people often don’t look at marketing as something that they like doing; they got into their industry because that’s what they do. But once you start seeing marketing as what makes your desired lifestyle possible, that motivates you to start researching and learning how to excel at marketing your business. It’s a necessity in order to increase income and create the lifestyle you dream of.
You may offer the best services in your niche, but if you can’t get them in the door, then how can they try what you’re offering? You have to get your clients in first. The bulk of your time should be focused on acquiring clients. Eighty percent of your time should be spent on getting new people in, getting people to buy more, or getting people to buy other stuff.
Marketing is key.
And to market effectively, it all starts by…if you read this whole article you should know…
…by knowing your NUMBERS.
If you’re in business, you need to put all of your marketing tools into play. If you don’t have the time, then find the time. It’s a must. This aspect of your business should not be overlooked or left in the hands of anyone else in your organization.
Contact us to get you started on closing your gap and helping you on your way to increase your income.
Follow our blog for more tips on growing your business and doing what you love.