Who controls your financials?
Chapter 2 – Financial Control – Rule your money
This is part of the ‘How to’ coaching series. An ongoing series of activities to make your business successful. Follow it step by step and see positive results as you develop a robust business model, set on a solid foundation.
Activity 43 – I can predict my future profits
Before they become clients, and see how to can be done, many people say to me… ‘how can you predict profits Alex?’
I’m tempted to say that I have a crystal ball and can see the future. The boring bit is that it’s not actually difficult to get a good handle on what’s coming down the line.
It all depends on how well you understand the effectiveness of your marketing and sales process; and the effort you are expanding to deliver to a set of known statists relating to your business.
The HowTo bit:
Pull together the following from your company records
Your last years trading income and costs – by week/month depending on the granularity that suits your business best. Create a line graph showing income by week/month. This will show the trends over the year; if your business is seasonal, this is an important trend to understand.
Create a graph of marketing effort verses results of sales for that marketing; again by week/month. This shows you when your efforts resulted in sales.
When you know you stats from the previous year, you will be able to build a prediction model. This can be on a spreadsheet or a financial planning tool.
so, if you want more sales/income, then you will need to increase the front end marketing and sales effort.
It sounds simple, and in some ways it is. Actually getting to the point where you have the model takes a bit of effort. Imagine how useful it would be if you knew what your business would look like in the future? Imagine knowing how many team members you’d need and how much income you could expect.
If you would like help in setting up your prediction model, Contact Us…
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