Track the Trends in Your Numbers
If you pay close attention to the trends in your business numbers then it can help to confirm busy periods during the year, periods of lower activity, the buying cycle of repeat clients, natural cycles in your particular market etc. It can also help signal any potential issues that need to be addressed when sales numbers drop outside of the expected market cycles. Here are just a few examples of how to use the trends in your numbers to plan and manage your business effectively.
When should you take holidays?
If you’re a single operator (with no-one to manage operations in your absence) then it can be challenging to take holidays at any time of the year, however, if you can identify periods of lower business activity this can be a good time to take a break (even if it means managing the business remotely from a holiday location). For example, in my particular business I know that the start of every year (just after Xmas) will be busy with planning sessions, so I take holidays mid year instead when the business owners I work with are focused on end of financial year wrap up and my business activity slows as a result.
If you have staff in your business then coordinating leave during periods of lower activity can reduce the time and cost of employing additional staff to cover their absence (as well as ensuring there is enough staff available during busier periods). It may not always be possible to coordinate leave in this way but it is something to keep in mind and discuss with your staff when you do your yearly planning.
When should you introduce something new?
Introducing new software, systems, processes or even marketing activities can consume a lot of time in setup, teething issues and any training periods. This period of implementation can be even more difficult to manage during busy periods (when everything needs to be working well) and it can impact negatively on the functioning of the business as a result. However, if you’re able to choose periods of lower business activity to introduce these new items it can help reduce the stress on both staff and the business during the implementation stage. And whilst marketing should be a focus all year round in any business (to keep the momentum of new business coming in) adopting a new marketing activity during a period of lower activity can also be a great way to increase sales again.
Are your customers happy?
If a client is unhappy with a product or service they may submit a complaint but they may also stay silent and simply go elsewhere for a variety of reasons (ie: they don’t want to go through the complaint process, they prefer to avoid the time spent doing it or don’t believe it will resolve anything). This is where a drop off in sales outside of the usual market cycles can help highlight potential issues in this area. And when this happens the first question to ask is which clients is this affecting? (as this can help you identify the source of the issue). If it’s new and potential clients start investigating the start of the buying cycle (eg: are there are any issues with the website ordering process, are the orders going out on time, are staff delivering the expected level of customer service, are clients being communicated with effectively at every stage of the sales process, has the market changed in some way etc). If the drop off is connected to previously loyal and repeat clients then the issue may still be related to the start of the buying process but it could also be due to the level of ongoing client care or a reaction to a change in the quality of the product or service. When previously loyal clients stop returning to a business it can be especially concerning, as it can quickly erode a source of income which has previously been relied upon. However, this is also why monitoring trends in the business numbers can help highlight any potential issues so that they can be investigated and addressed as soon as they occur.
Is it time to change a product or service?
Some products or services stay current for decades and others need to be refreshed or phased out by something else (eg: certain types of technology, fashion items, etc). A fall in sales numbers can sometimes be an indicator of this and once it’s confirmed that the drop in sales isn’t related to a change in the market (or some of the customer service issues mentioned above) further market analysis and research will need to be completed. This could include surveying clients directly in person, via email and/or social media channels to seek some insight into whether a particular item now needs to be updated or replaced.
In addition to managing your income and expenses effectively use the trends in your business numbers to help you plan more effectively, address issues before they erode your potential income and maintain a level of service that keeps your current and future customers happy.
Photo credit: iStock.com/RidoFranz