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The two key figures you need to know

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How many of you are struggling right now to create a solid sales plan for your business?

Maybe you’ve tried googling the best way to do it, or have tried to set up a spreadsheet but given up.

If that sounds like you, then this post is for you. I will cover how to start to build a plan - by finding the two key numbers that will help you unlock a deeper understanding of your business .

Once you’ve read through this, don’t forget to grab a copy of my roadmap to building a profitable retail business here. More on that later though, for now, let’s get started.

Do you feel comfortable creating a sales plan?

I speak with a lot of small retail business owners, and I’ve noticed that very few people feel comfortable coming up with a sales plan. In fact, some people question why they should have one at all.

While coming up with a sales plan may well be the bottom of the list after the millions of other jobs that you have to do, I’d like to make the case for why knowing simply two numbers about your business can make a huge difference.

Better to start simply with just two numbers

If the idea of a complicated spreadsheet that will take an age to set up and then sit there gathering dust has you running for the gin bottle, I suggest that instead you start by figuring out these two numbers.

Work out these two numbers, put them on a post-it note and you’ll have taken an important step that will help you focus on your business goals.

The first number you need to know is the break-even number

What is the first number that you need to know? It’s the number of items that you need to sell each month to cover your costs. It’s a key figure that every business owner needs to know.

Step 1 - To figure this out, write down every fixed cost that you have in your business, from marketing to rent (if you rent business premises), to the cost of scheduling your social media, equipment, salary, absolutely everything. If you pay some of these on an annual basis, break it down into a monthly figure by dividing it by 12, so that at the end you have one figure for an average monthly cost.

Step 2 - Work out the average profit (not sales) that you make on each item.

Step 3 - Divide your total costs by your profit, and that is the number of products that you need to sell per month to break even.

An example - your average profit per item is £10. Your fixed costs are £1000 a month. Each month, you need to sell 1000 divided by 10 = 100 units to cover your costs.


If you want to break this down into a weekly or even daily plan then you can, but at this stage, when you are first putting together a plan, a monthly figure will give you a concrete goal to focus on without getting distracted by the fact that sales patterns can vary from one week to the next.

The second number is your ideal sales number

Once you have the first number, the second one is much easier. This number is going to reflect your ideal number of sales per month. Think about how much money you would like to be taking home in your business. In other words, if you could pay yourself a salary, how much would you like it to be each month?

Once you have done that, divide that number by your average profit that you worked out in your last step, and figure out how many MORE units you need to sell on top of your break-even number to achieve that desired salary.

So, each month you would like to take home £2000, and your average profit is £10 per item.
In order to make that additional money, you need to sell £2000 divided by £10 = 200 units per month ON TOP of your break-even units to achieve that salary. In other words, your ideal sales units per month is 300 units - 100 break-even units and 200 to bring home your ideal salary.

That’s all there is to it

And that’s it. You’ve calculated two really important figures that will help you keep on track with your business. Write them down and stick them on a post-it note somewhere you can see them to help you stay really focused.

I hope you enjoyed this quick training, next time I’m going to look at how you can use these two numbers to create a basic yearly plan for your business.

Other Ways I Can Help

If you want a straight-forward set of steps to build your retail business - download my free roadmap “Retail Entrepreneur’s Roadmap to Profit” right here.

And don’t forget to join the discussion inside the Female Founders In Retail Facebook group where you can meet other women building amazing product-based businesses. If you’re not already in the group, click here to request to be let in. See you in there!

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