Your money is the bottom line in your business. When you are starting to evaluate your year, I recommend you start with the money. Here are 3 areas I find particularly helpful when evaluating offerings and where to direct marketing efforts.
Money Money Money
What is your profit pie? What offerings make up where your money is coming from. You want to look at:
How much money has each of your products/services brought into your business?
How many of each product/service did you sell?
What is your gross vs. profit (revenue-expenses)?
You want to look at how much money each offer brought in but also how many of each offer you sold because this allows you to see a better view of your flow of traffic and profits.
If an offer is bringing in a lot of people but not a lot of revenue you want to ask yourself how you can capitalize on that flow of traffic to potentially leverage them for a higher priced offering.
Is your profit pie fairly distributed or are one or two services/offerings bringing in most of your money?
If it’s fairly unbalanced you might want to consider doing away with those underperforming offerings, would your time be better spent promoting a better performing offering? Are there ways to expand on what is most popular?
But before you get too gung-ho over that offer that seemed to bring in lots of dollars, make sure you check yo self. What was your actual profit (revenue – expenses) of that offer. Plus don’t forget to take into account your own time which leads me to my next point…
Do you REALLY know your expenses?
ROI is Return On Investment but when you are a service-based entrepreneur you need to think a little border than $$ dolla dolla bills. You need to also consider your time invested!
Do you know how much time it takes to get a client from payment/start of project to finish?
Add up all that time and divide that into the cost of the package. So how much are you making an hour?
You need to do this with each of your packages offered, while you might sell a lot of a package and it might make up a big chunk of your revenue, it might not be as profitable as you think.
If you are making low per hour, you need to re-evaluate that package.
You can change price
You can take out steps or pieces
You can see if you can increase your efficiency (is it taking you forever b/c of slow communication or endless edits). You might need more boundaries.
You can break the package into smaller chunks where you know it will be profitable.
You can scrape the package all together.
If you are not considering this as part of your financial benchmarks you need to add it ASAP.
You don’t want to be hard promoting and going after clients for a package that is making you a few dollars on the hour.
Clients Clients Clients
How many clients did you have? Did clients move up packages? Do you have repeat clients?
Investigate how much each client brings to your business.
Repeat clients and the flow of your clients is important to determining your marketing strategy and your offerings.
Look for patterns in buying behavior when evaluating your offerings, while one offering may only make you a small profit, that offering may be leading a lot of your clients to a higher end offering. If that is the case, you want to make sure to know that before axing any offerings.
Are you capitalizing on your client leads? Do you offer any maintenance or upsell opportunities to existing clients? You want to try to maximize as much as possible on your efforts to getting clients through the door by making sure you have a logical and profitable flow to your offerings.
When formatting your plans for next year and your marketing strategy, it’s super important to know what is working and not working. Knowing the above information can help you more easily understand the big picture of your efforts.
Work with the highs, if a package is making you money that might mean you put more of your marketing efforts on that package. If another package only got crickets then consider axing it or if you know you didn’t really market it, then you might give it another chance and schedule in marketing focused on that package.
Ask Yourself: How can I capitalize on what’s working, and how can I cut, change or refocus efforts for those that aren’t working?
These kinds of questions are key to crafting a solid marketing strategy and plan for your business to grow. It’s all about figuring out what is working and not working and experimenting smartly. I do recommend you add these questions to your quarterly evaluations as well, they aren’t just end of year questions. 🙂
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