The Profit Map – Revenue

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Hi, this is Judi Otton with GrowthCast and I’m back with your Fiscal Fitness Tip of the Week. Today we’re going to talk about the second topic in the Profit Map – Revenue. We’re going to talk about how to assess your business’s health with respect to revenue. The first area I want you to look at is the sources of revenue. Are you getting a large percentage of your revenue from one client or one industry? If so, this is dangerous. Should something happen to that client or in that industry you’re going to be in trouble. Obviously, you’re not going to turn down business from that client or clients in that industry, but I would encourage you to reach out and broaden your horizons a little bit. The second area that I want to talk about is revenue goals. Do you have revenue goals? And do you know what it takes to achieve those revenue goals? How many proposals do you need to put out? How many leads did you need to generate? How many hits on your website before you can close a sale. Now, if you don’t know these sales conversion numbers, that’s okay. But I do want you to start tracking them each month. How many leads did you get? How many proposals – or whatever the steps in your sales cycle are – and start measuring those sales conversion ratios so you can back into, I need X leads to generate Y dollars. The third area I want to talk about is pricing. I know this is a tough one for almost all business owners. It’s hard to raise your prices. When was the last time you raised your prices? And is it time to think about this again? I encourage all the business owners that I work with to push themselves a little bit out of their comfort zone on this one. And the last piece that I want to talk about is your receivables. These are the people that owe you money. How many, how much of your accounts receivable is more than 60 days overdue. What percentage are more than 60 days since it was due for you to be paid? It’s wonderful to make the sale. Congratulations. But unless and until you get that money in the door, it does nothing for you. So this is the second category from your Profit Map. I’ll be back next week and we’re going to talk about operations. This is Judi Otton with your Fiscal Fitness Tip of the Week. See you next week. Bye.