Does your business peak and trough?
Let me start with a question for you. Do you go through peaks and troughs in your business - months where it’s really busy and months where it is incredibly quiet?
Do you get all excited during the busy times, but then in the quiet times wonder what on earth you did wrong? Or maybe, you’re about to start a business and you’ve been told that you need to come up with an annual plan, but you are totally stumped where to begin.
If you are really comfortable with creating plans, love numbers and have a solid plan that you feel really great about, this is not for you! You can stop reading now, and I promise I won’t be offended.
For everyone else, if you ever feel like you’re on a rollercoaster, and that you’d love a birds-eye view of your year, then read on.
At the end of the article, I’m going to tell you about my free roadmap you can download right here to walk through the steps to building a profitable business, but for right now, let’s focus on the planning.
Perhaps you don’t love numbers
Are you a creative entrepreneur? Did you start your business because you love beautiful product and beautiful design? Then I’m guessing that you, like many of the people I work with, are not crazy about numbers.
It’s better to have a simple plan than none at all
Whenever I am trying to do something new that I am not comfortable with doing, I feel like I have a tree-full of squirrels running around in my brain. I suddenly come up with a million and one different things that are more important than the task that I am supposed to be doing.
Sitting down and working out a yearly plan can also feel like that, but the main thing to remember is that it doesn’t have to be complicated.
It is much better to have a simple plan with two numbers for each month that you actually look at and measure yourself against than it is to have a complicated spreadsheet that you never look at.
If you’re wondering why in fact you need a monthly plan at all, then let me ask you this. Would it be useful to know when the best time is to go on holiday? Would you like to be able to identify the one time of the year that it’s worth spending your precious advertising budget to really push sales? When your business is slow, wouldn’t it be great to understand that it’s part of a yearly pattern instead of panicking?
If you’d like to have an overview of your year that will leave you feeling in control and focused, then creating a simple plan is the way to go.
Step 1 - Revisit your two key monthly numbers
In last week’s post, I covered how to work out your two key numbers for your business - the break-even sales units you need to achieve each month, as well as the ideal sales units you want to achieve. If you missed it, take a look before you keep reading!
Start by creating a very basic template that shows your break-even and ideal sales units for the whole year - assuming that each month is the same.
Make sure you make a note of the annual total - once you start changing each month, you’ll need to make sure that the year comes back to that total.
Step 2 - Think about the shape of your year
If you have been in business for more than a few months, you will be able to use some of your sales history to give you an idea.
Of course, when you are growing, it makes it harder to see what your typical pattern per month will be, and of course, if you know that you are going to be growing month on month, you will want to reflect that in your plans as well.
Seasonal events, Wedding Season, “New Year, New You” if you are in health and wellness - think about your products, and your customers, and make a prediction based on when they will be buying, and when will be your quiet periods.
Step 3 - Time to make a yearly plan
Start tweaking your numbers. I know that it doesn’t sound scientific, but what you’re trying to do here is create a framework that you can use to focus your business. You will be making an educated guess at this point, but that’s OK.
If you’re thinking that it can’t possibly be as simple as making an educated guess, let me tell you a secret. That’s how most of the planning in big retailers starts. Of course we have a lot more detailed history and sales figures to use to build our forecasts, but ultimately, we start with what looks like the most sensible forecast, and we amend it based on new information we receive.
The main thing here is to shape your year, but make sure you come back to your annual number.
So, take sales out of January, but make sure you put them back into December. Know how much you need to push your peak months to make up for any quiet periods.
If you have kids, and you know you cannot drive your sales during the summer holidays, take sales out of those months but now you know how much you have to put into other months to come out even over the year.
Et Voila! A Simple Yearly Framework
Play around with your monthly numbers until you feel that you have a rough shape that makes sense, and that balances back to your yearly number.
And now you have a basic framework that will help you outline your year.
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