Romy Taormina

Psi Bands - Nausea Relief Chief/Co-Founder
Pacific Grove, CA
http://www.psibands.com

    Know Your Numbers - Five Practical Tips

    October 28, 2009

    You have all heard this statement and intuitively know it to be true: “Knowing your financials is the key to your business success.”

     

    Here are FIVE practical ways to apply this statement:

     

    Look carefully at your daily, monthly, quarterly and annual sales. Your sales will drive all other decisions.

    1. Are you selling more on certain days, seasons, holidays? Understand where your sales are coming from and capitalize on them. Will you extend business hours during certain seasons/holidays/weekend days because that’s where you generate the most money? Should you put more marketing dollars towards a certain season because your track record shows stronger sales during that timeframe?
    2. Use your sales data to help forecast inventory. Know when you will need to manufacture more product so you can financially plan for this cash infusion and so that you don’t run out of inventory.
    3. Use your sales data to help you determine your hiring needs. Maybe you don’t need year-round full/part time employees. Consultants and interns are a great option. If you know you’re approaching a busy season, hire in advance so you are prepared for the season. There is great talent out there willing to work on a seasonal, part-time basis. Many are virtual assistants. Focus “on” (not “in”) your business. 
    4. What % of sales have you allocated towards marketing? Do you need to adjust this number based on your sales performance (a marketing budget based on actual sales numbers rather than randomly making decisions about where to best spend your hard earned dollars)?  If you are like most entrepreneurs I know, you have a small marketing budget. What can you do with what you have to be laser focused and get results?   
    5. Use your sales data to make sure you have a plan for paying yourself. Maybe you can not pay yourself initially, but have a plan for doing so (i.e. at what sales point should you be able to do so?). Even a small paycheck can go a long way towards providing motivation – for you and your family (i.e. spouse). After all, you are running your business with one goal being to make money.

     

    P.S. One of Psi Bands’ goals is to land another large retail account (i.e. 5000+ stores).

    Read Romy's other blog entries >

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