This content is restricted to site members. If you are an existing user, please log in. New users may register below.
How To Use These Worksheets
Click on the down arrowhead for more information about each item
Tab 1 - Bus Rev Needs – How much revenue do you require to make your business profitable?
Many entrepreneurs don’t know how much money they need to earn from their businesses to make it viable – for now and for the future.
Move the top and bottom sliders to the amount of money you need to meet your basic needs and the amount of money you would really like to earn. The middle slider lets you set the profit margin for your business or what you think your profit margin might be.
The results show the amount of revenue your business needs to enable you to take those amounts out of your business.
Tab 2 - Customer – How effective are you at getting and maintaining customers?
How many prospective customers do you have? This spreadsheet lets you break down your prospective customers and place them into your ‘Sales Funnel’. From this, you can learn about your ideal customer demographic: who are your real customers, and who should you be spending your time and money to move down the funnel into position to be ready to buy your product?
By the end of the spreadsheet, you will determine your Conversion Rate of Prospects into Customers. The greater your conversion rate the more efficient you are at getting customers.
Tab 3 - Value – What is the value of setting up a referral-based business?
Often entrepreneurs neglect their fan base of happy customers. Take advantage of the goodwill you have generated through your excellent customer service and product value to create additional future clients.
Data on Prospective Customers and Customers is brought forward from the previous sheet. Input your product price, any upselling revenues you generate, your number of sales (not just the number of customers) you made, and the number of customers who have bought your product more than once. Input your marketing cost, plus the cost of your customer referral and rewards programs. This will show the cost to bring in a new customer and to earn a referral or repeat customer.
Tab 4 - Profit Margin & Breakeven – How profitable is your business?
Do you know how much profit you earn? Many entrepreneurs do not know this vital piece of information.
If you aren’t making a profit, you can’t stay in business.
By carrying forward some of the financial information you have already entered you can break down your costs into fixed and variable. Fixed costs do not depend on the cost of the product, and include office rent, furniture, computer, administration wages and salaries and insurance (amongst other costs). Variable costs are dependent on the cost of the product or service, such as contract or manufacturing labor, raw materials costs, etc.
Input the total monthly fixed costs and the cost per unit of your variable costs. The spreadsheet will calculate your profit margin and your breakeven point. The breakeven point is how may sales you have to make before you earn a profit. If the resulting answer is highlighted in red, you cannot earn a profit with your current cost structure or pricing. Can you sell the required number of products per month or per year? If not then you must make changes to your approach to business.
Tab 5 - Summary – What changes would increase profit?
How is your business actually performing? With a summary of all the information you have input so far, you can experiment with the 5 Parts of Profit to see what would happen if you made some changes to your business model.
The fields at the bottom of the sheet, Needed Income and Desired Income compare the results with what you said you wanted to earn in the first sheet. If you are doing better than you originally asked, the answers are highlighted in green. If not, they show up in red as a warning.
Tab 6 - Pareto – Are you Using Pareto Charts as Decision-Making Tools?
How do you know the right problems and business weaknesses to work on? Pareto’s Rule is that 80 percent of all results – both positive and negative – are caused by 20 percent of the causes. It’s a general rule of thumb but tends to hold true overall.
In this case we use Pareto’s Rule to list your top customer complaints and the impact they have on your business. You may have to research what the financial damage of complaints is to you. Rank these complaints in order of importance and then tackle them in order. In The Profit Machine (hyperlink) I give examples of how this works.
The before and after graphs show the effect of change on your business.
Tab 7 - Discounting – Does discounting help or hurt your business?
How proud are you of your product or service? Do you truly believe that people need to own or use it? If so, why do you consider discounting the price? This spreadsheet shows the impact discounting has on your profits.
Input your revenues, and your fixed and variable costs, to see what happens when you give a 10 percent discount and the impact of a larger 33 percent discount. In our haste to get the customer to buy we often give up all of our profits – and if we do this enough we will go out of business.
Tab 8 - Net Promoter Score – How happy are your customers?
How do you know that customers like you and appreciate your product? Often we grope blindly with different marketing and sales tactics to find out. Ask your customers one question: “On a scale from 0 – 10, how likely are you to recommend my business to your friends and family?”
Total up the number of 9 & 10s responses, and the number of 0 – 6s. Divide the number of 9 & 10s by the total of responses (just leave out the 7 & 8s – they are ignored).
This is the percentage of people who love you and your product. They are called promoters and this is the type of customer you really want to have 100 percent of the time.
If less than 50 percent of your customers are promoters, you need to make changes to your customer service efforts and quality of your product.
Tab 9 - ROI – What’s the return on your marketing investment?
If you spend marketing money on sending out paper flyers, how do you know it is more effective for customer response than a free email blast to your website subscribers? Using this spreadsheet is the only way you can tell.
When you or a partner invest in your business you want to make sure that there is a profit for the investor –Return on Investment or ROI.
Look at the money you have invested in the entire business or specific projects or marketing efforts as examples of where to apply this concept. Input the amount of money you spent on a project, the amount of revenues, and the amount of profits you earned from it.
Your ROI based on Revenues and your ROI based on Profits are both calculated. Sometimes we feel that just because we earned more money than we spent, the strategy was successful. However, unless you are earning profit from the strategy, it is not a viable initiative.
Tab 10 New Customer Cost – How much does it cost to gain a new customer?
What is the value of a program to encourage repeat customers? We often forget our customers after they walk out the door, and as a result we forget an untapped source of goodwill, referrals, and future business.
Since existing customers already know and trust your business (Tab 8 shows it, right?) you should not have to spend as much money on marketing and sales to get them to return. If you have a repeat or referral customer program that has incentives to come back – such as a coffee card or preferred customer discount – you can calculate which is better for your business. Green is good, red means you need to work on your customer retention.
Do these spreadsheets show you weaknesses in your business model? Do you need a strategy to increase your profit margin to reach your desired income?
Contact me to discuss effective tools and strategies specifically for you.