So how do you increase what you earn?
Rather than just sitting hoping, or worse still moaning when you are still not happy with what you earn, instead set yourself a goal i.e. a target turnover you want to earn in a year and then ensure you work towards that.
A good place to start is to look at your turnover over the last few years and work out what might be achievable in the next year. You can quickly get your annual turnover from the self assessment form. Just update the dates and jot down your turnover over the last 3 – 4 years.
Hopefully your turnover has been increasing year on year, although that is not always the case. Sometimes personal circumstances (maternity leave) or market conditions mean we have dips in our turnover. Now decide on a figure that you want your 2017 turnover to be.
Now divide that figure by 12 – you get your monthly sales target. If that looks way more that you can currently hope to get a month, then you are either being too ambitious with your turnover, or you need to ramp up to more that that over the next year.
For example, if I want my turnover to be £25K next year, that would mean average monthly sales of £2,083, but if I’m not currently billing that much, you will need to put a plan in place to ramp up your sales each month so you can achieve a total of £25K by the end of December. A bit like this:
|Month||New turnover split equally||Adjust to ramp up slowly|
However is even that realistic. Have a look at your monthly sales over the last few years to see if there is a pattern to when you make most of your sales. You can do this with the Monthly Income report.
You might have a really clear pattern, or be a bit all over the place like these figures. However in this you can see that July and August are always quite low due to the summer break, and November and December are always higher due to Christmas related sales.
So now you might want to readjust your sales figures again.
|Month||Adjust to ramp up slowly|
Great, so now you have a set of monthly sales targets for the year ahead, how are you going to achieve them. Do you need to spend more money on advertising? Do you need to build new relationships with suppliers? Do you need to go to more trade fairs?
A good place to start is to have a look at how you make most of your money. You can run another report in MyCake to start getting a better picture of that.
Income by customer:
Income by product:
If you use the product functionality when you do invoicing, you can see which products contribute most to your income (watch out though, if you are inconsistent in the way you invoice and don’t always use the saved products, this pie chart might not be including all your income)
Income by source
Once you have run these 3 reports, you’ll have a fairly clear idea who your most lucrative clients are, what your most lucrative products are and which sources bring in the most income. These would be a good place to focus any marketing activities.
You can also have a good think about why some things are more lucrative than other – for e.g. you might have sold really well at one trade fair but not another. Why was that – did you have a bigger stand or is it more suited to your products. Reflection will help you decide your tactics for the year ahead.
You can also look at what your advertising spend has been over a period using the Expenditure Type Trend and selecting ‘advertising’.
Once you have set your monthly target and revised your marketing strategy, don’t forget to keep an eye on your actual figures each month and check how you are going.
With all that in place you stand a lot better chance of hitting you new turnover target.