Posts Tagged ‘Business Numbers’

Since last October, several people have persevered in the Numbers Accountability Group. We meet once a month as a group, and I also coach each person individually for 30 minutes.

My idea behind starting this group was two-fold. First, we don’t take the time to review our business numbers thoroughly every month, and we might not review them at all if things aren’t going well. Second, we don’t always know about all the information our business numbers can provide. So I started a group to review our numbers together, and to teach new ways to learn more from them.

We’ve talked about a lot of different concepts: cash flow, breakeven point, the lifetime value of a client, and other business numbers topics.

But last month, I thought it would be a good idea to talk about what to do if we’re  afraid to look at our business numbers.

Nine Suggestions

Here’s what we came up with together. I think you’ll also find these suggestions helpful if you’re afraid to look at your numbers:

1.  Remember my purpose (i.e. why am I doing this business in the first place? Is that purpose still true? Can it sustain you through rough times?).

2.   Talk to other people (do you have people who support you? Fellow business owners, leads group, service club, coach?).

3.  Meditate (and/or pray). A little quiet time can clear the mind and make the next right action clearer.

4.  Take some action (marketing action, perhaps?).

5.Take a break from thinking about my business numbers (sometimes a break creates a breakthrough).

6.    Try to identify what my emotions are. This is a good one. There is the thing happening, and then there’s the story about the thing, i.e. “Sales are down, therefore I am a wretch.” (Only the first half of that sentence is true. Are you telling yourself a nasty story about a neutral fact?)

7. Remember to be kind (to yourself, especially).

8. Remember that business goes up and down in cycles (this is true for every business except possibly tax accountants and morticians, but I think even they are not exempt).

9. Build a prudent reserve (AKA business savings).

Prudence Pays

This last one, “Build a prudent reserve,” is possibly one of the most important. If you don’t have money set aside for emergencies, open a savings account RIGHT NOW and get started. I use www.ingdirect.com, but there are other banks that will automatically take money out of your checking account each month. You can start with as little as $10.00 per month, and create a savings account for both your personal and your business expenses. Even $10.00 builds up. It’s the miracle of two things; regular saving, and compound interest.

Tags: Business Numbers, Business Plans, Fear, Truth

Setting Prices is Scary

Pricing, especially for people who set the price for the product or service, and deliver the product or perform the service, can be very tricky. It’s easy to confuse the price you need to charge for what you make or do, with your self esteem.

You can combat this two ways:

1. Research what your competition sells their work for

2. Figure out how much value you deliver, and set your price at some fraction of that value.

Research is pretty easy to do: the internet is an unlimited source of pricing information; and even in the unlikely event that you can’t find an exact price for what you do, you can pick up the phone and call someone outside your area and ask what they charge for a similar product or service.

If you do this research, you’ll find that there is a huge range of prices for almost every product or service sold. People who go to the local barber shop and pay $11.00 (plus tip) for a haircut may be flabbergasted (or horrified) to know that you can pay $400 for a man’s haircut (and even higher for a woman’s cut). In my field, you can pay a coach $25 an hour, or $5,000, depending on who you hire.

Why would someone pay $400 for a haircut? Why would someone hire a coach for $5,000 an hour? Because they feel like they receive much more value than the cost they incur. Perhaps the $400 hair cut makes you look a lot better on TV, hiking your ratings and securing your contract for the next five years. Maybe the $5,000 coach showed you how to break through a barrier that had been blocking you forever, enabling you to triple your income.

Farfetched? The $400 haircut and the $5,000 per hour coach both exist. More than one person is willing to pay for these rates for that kind of value.

If you haven’t raised your prices recently, or if you simply want to expand your mind on the subject, read these blog posts.

www.fluentself.com/blog/biggification/the-art-and-science-of-pricing/

www.fluentself.com/blog/biggification/coming-up-with-prices/

http://www.shaboominc.com/blog/ (read the November 20th post called “Does Your Pricing Prevent Customers from Committing?”

Do you need to raise your prices? Are you afraid? What’s next for you?

Tags: Business Numbers, Pricing, Value

One Small Step for the Number-Phobic…

Here’s a small thing you can do if you have your own business and don’t like to look at your numbers.

1. Pick your best client

2. Get out your calculator and add up how much he/she spent with you in 2009 so far.

What this Number might tell you

1.  Does this best client represent a big chunk of your whole business? Like more than one-tenth (10%)? You don’t have to know the exact percentage of your sales that this client represents. You don’t even need to calculate it. You can judge this from how much time you spend with them. If this one client makes up a lot of your total sales, this can be risky.  This is a good thing to know. Proceed to number two for the fix.

2. Whether this client makes up too big a portion of your total sales or not, it might be nice to find more of them. How did they find you, or how did you find them? Can you do the same thing again and find more clients?

3. Have you said thank-you lately to this client who loves you and your work?

What a single Number can tell you

See how knowing this one number can give you a lot of information about your business?

You can say one thing for sure about the language of Number; it can say a lot with one little numeral.

Comments

Your business just spoke to you. And you heard and comprehended what it said.

I welcome comments about what you found out about your best customer, and what you did after you understood the information.

Tags: Business Numbers, Numbers

Listening to your business. No, it doesn’t speak English

Your business talks to you. It’s true. It doesn’t speak English (or Spanish, or any other language with words); it speaks Number.

Number is a different language.  That’s why it can be challenging to learn, just as learning any new language would be. And it’s harder for some people than others.

But we don’t usually stigmatize people for taking longer to learn a foreign language the way we seem to stigmatize those who don’t catch on to Number as fast. Even though Number has a different “alphabet,” like Russian and Chinese. If you were studying either of these languages, you’d give yourself a break if you weren’t fluent after week #1.

If you happen to be right-brained, or you just got off on the wrong foot in elementary school math class, you may have contracted full-blown Number phobia.

If you work for someone else, you can charm someone into balancing your checkbook and handling any other Number transactions for you. But if you own your own business, Number phobia can cause great pain, leading sometimes to the actual death of your business.

What to do if you have Number Phobia

If this is you, here’s your assignment for this week:

1. Remember that learning how to understand Number is the same as learning a new language.

2. Take the rest of the week off from condemning yourself.

3. Return here later in the week for a simple, small step you can take to begin understanding what your business is telling you in Number.

If you have a difficult time looking at, or understanding your business numbers, I invite you to comment. What have you done so far to overcome this issue?

Tags: Business Numbers, Number, Numbers