Do you feel like you're always on the back foot? Swimming against the tide?
It's very common for business product owners to feel this and a recurring topic of my business mentoring. The good news is I can help!
Why does this happen? Quite often creative business owners are given general business advice or advice aimed at service businesses when they first start out. This is problematic - product businesses for example - have a unique cost structure - service businesses have a bigger profit margin as they're not paying for stock. Up to 50% of your revenue is going straight on stock!
If the advice you're receiving is not acknowledging that your stock is a big component of your cost structure then you're going to run into problems.
Planning, planning, planing - I really advocate sales planning - not least because the process of mapping out the amount of money you believe will be coming into a business each week or each month then it really helps you understand how much money you can realistically expect to be coming in.
Map that against your outgoings, then you can create an accurate or a realistic view of your cash flow - if you don't then the feeling of swimming against the tide begins. If you're not linking the amount of stock you should be buying to the amount of projected sales then you may well be purchasing too much stock - which as I've said is already a huge part of your outgoings as a product business owner. So you are on the back foot - literally.
Your profit margin - how much money you're making every time you make a sale.
You need to be clear about how much you need to make with each sale to cover all your expenses - otherwise money is always going out before it comes into your business.
So to recap - advice or support often focuses on either general business advice or service business advice which means 'stock' is overlooked and therefore so is your unique cost structure.
You don't have a clear plan. You can't see how much money you're expecting to come in so you're unable to link that to your sales. Linking your sales plan with your stock purchasing will make sure you're not spending too much money on your stock.
Are you making enough profit every time you make a sale? if not there's not enough money coming into the business overall - you're outgoings are matching up with your revenue.
How do you get off the treadmill? A couple of quick tips
If you're experiencing this and would like to learn more on this topic - mapping out your sales and planning out your stock - I'm just about to release the 1st 2 modules of my new course called 'Grow Your Profits', which is for the 'Resilient Retail Club' members.
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