What did you think of my initial 6 tips for generating revenue for your business? Those disciplines ranged from how to invite useful scrutiny to improve operations to prioritizing publicity to creating multiple lines of business.
I hope you’ll let me know what you think on those (and these below!) plus what has worked in generating revenue while running your own company.
Our focus in the next part of our conversation: metrics
It’s on tracking the not so intuitive metrics that will give you more control over the outcomes of your efforts.
Traditional metrics captured through standard financial reporting aren’t enough. Business owners need to establish methods for consistently tracking more than what appears on profit and loss statements.
5 measures: consider including these among those you track regularly.
- 1) Work backwards to move forward
- 2) The ‘lag before you bag’
- 3) Prepare to bend by predicting the trends
- 4) Establish clear intentions and quotas when attending conferences
- 5) Break it down to build it up
Image Moving Forward by Laura4Smith, Creative Commons.
If you’re tracking important ratios, you know how many qualified prospect meetings it takes to generate one client and the average sale amount per client, etc. With only these two pieces of information, you can control how much you sell each month. Determine the desired sales volume, then conduct two to three times the number of qualified prospect meetings indicated in historical ratios as necessary for achieving your revenue goal.
The lag time between your first meeting with a qualified prospect and closing the sale is an essential ratio for managing your productivity. The sales you bag today likely began at least 3 months ago. In establishing realistic deadlines for the achievement of your goals, knowing your average lag time is essential. When calculating total lag time, don’t forget to add in the time it takes to render the service before you bill it, and the time between the billing and the receipt of funds — plus the time required for funds to clear the bank. Requiring an up front deposit can help bridge long lag times.
A phrase you might want to include in your contracts could be: A 30% deposit against the total contract is required before work begins to reserve space on our business calendar. For your convenience, an invoice for this amount has been enclosed.
Be vigilant about monitoring relevant trends, since they’re always in flux. Just as important are tangential trends – forces that could affect the trends you’re already monitoring. Doing so enables you to foresee and adapt to emerging trends before your competitors do. Set up Google Alerts on key industry topics to better inform the monitoring process.
Recoup the opportunity cost of attending conventions and other networking meetings. Get an attendee list in advance of the meeting, identifying and researching your targets before you even leave for the event. Then make it your mission at the meeting to establish contact with and engage these targets.
Remember: attendance is not an outcome. Increase the probability that your attendance at events will result in new business by doing your homework in advance.
Identify key result areas of your business. These are large umbrella functional areas critical to your success.
Examples may include prospecting, delivery, writing, marketing, speaking, and new product development, etc. For each key result area, assign measurable goals for each month or each quarter. Break these down into component parts and include the interim deadlines for each component in your calendaring tool. In addition to helping you stay on track, this will also provide easily visible evidence that you are consistently achieving — even if the results aren’t in yet.
Don’t wait to begin tracking these metrics until you need them
Because doing so can make adjustments or recovery harder and more expensive. It is essential to maintain these metrics consistently as touch-points so you’re equipped on an ongoing basis to modify current initiatives to better ensure the achievement of desired outcomes.
- Francie Dalton and her series at Women Grow Business;
- Phil Johnson at Ad Age on how his firm uses social media to get new prospects;
- GrowSmartBiz and the power of ‘the ask’ in sales, business relationships, and more.
Guest contributor Francie Dalton, CMC, is founder and president of Dalton Alliances, Inc. and author of the recently published book Versatility. Her Washington, DC based consultancy helps the C-Suite solve business nightmares. Francie equips clients to deal with what they didn’t see coming (and shows them there’s always another way to win!). She welcomes a chance to meet you via Twitter or on LinkedIn.