Defining you success is probably one of the most important things you need to do, so you can measure how your business is doing on your own terms. We’re paving your path here—one goal at a time.
- Decide what type of business you want. Are you looking for a lifestyle business that provides flexibility and freedom? Or a company that increases in size (revenue, employees, and locations) and generates enough value to eventually exit the business?
- Decide how to measure your business success. What metric makes your business successful? It could be any of the following (or something else):
- Number of clients.
- Business owner salary.
- Number of employees, products or locations.
Calculate how much you really make—by product.
Do you know what products are actually producing the most money? No—not which products you sell the most o— but which make you the most profit?
For instance: Product A sells at $10, but costs $7 to produce. It moves off the shelves in the summer, but you only make $3. You have to buy ti in advance, store it on site, and you may have left over inventory. Product B is a custom item that sells for $12 and costs you $10 to produce. You only make $2, but you receive the cash up front, your manufacturer drop ships the product, and you have no remaining inventory. Which product do you prefer? Think end of season sales.
Revenue and Profit Goals:
Determine the number of orders or services you’ll need to sell in order to achieve your revenue goals. It’s easy—I promise. Just divide the amount you want to make by the average selling price of your product to figure out the amount. For example:
$5,000 / $15 = 333
If I’d like to make $5k, and each product sells for about $15, I’d need to sell 333 products to hit that amount.
Congratulations, you’ve reached the final step! In order to to determine your profit goal, take the amount of money you want to make and divide it by the number we just found (your profit margin).
Our best piece of advice: Take Daily Action!
Focus on activities that generate profit. Create a list of five tasks that need to be completed to reach your profit goal from yesterday. Put those tasks into your schedule by making a recurring, daily plan. (These are the tasks you do each day to generate prospects and leads, or to create and deliver your product or service.