Closing the Gap

No matter what stage of development your business is presently in, all small business owners want more revenue. That is always priority number one and to be honest, it should be.

As the year starts to pass us by very quickly you may be asking yourself, how can I achieve more as we creep towards the final half of the year and the beginning of a new financial year? Sounds ridiculous doesn’t it? Where have all those months gone?

As fast as the year may go, so does our opportunity to really create the results we want in our business.  So how can we really achieve more? The difference between those just going with the flow and those who grab hold of the steering wheel with two hands and deliberately drive their revenues forward is in how they plan for the achievement of higher revenues and then what strategies and tactics they implement, and the actions they take in order to achieve the desired outcomes listed in that revenue plan.

Identifying Your Gap

Before you get started in putting together your revenue plan, it’s important to know where you are now and of course where you want to be. This is what we call your gap.

A gap analysis defines your present and future objectives in both financial and non-financial terms. The difference between the two is the gap and becomes the starting point for building your business to the next level.

A gap analysis need not just be about money, it is however usually where most people start, including your revenues, profits and cashflow. Your non-financial considerations could include the number of team members, your product or service offering to the marketplace and the number of satisfied customers. Other areas could also include the number of hours you work, the number of recreation days, family days and the holidays you take.

To create your own gap analysis, simply list the goals that are most important to you and your business. List where you are today with each of those measurables, using a number scale system. E.g. on a scale of 1-10, 1 representing little results are being achieved right now and 10 being the ultimate place where you want to be. Write down a number for each goal that represents where you are and then write down a number that represents where you want to be, let’s say, in one years’ time. The distance between those two sets of numbers is your gap. Now you can start working on closing the gap.

Once you define the gap that exists in all areas relevant to your business you can then create a revenue plan that will map out the exact process required so you can eliminate that your gap, reach every one of your goals and objectives and do so within a very specific time frame.

Creating a Simple Revenue Plan

Your revenue plan need not be too complicated. It is an outline of how you intend to close the gap between where you are and where you want to be. Your Revenue Plan actually begins the process of generating leads for your business by knowing specifically the product and/or service your business will offer, the number you want to sell, the price you will charge and when you project these sales will take place.

Once these objectives are clearly and specifically defined you will have an excellent idea of the number of leads your business needs to generate in order to accomplish every one of those objectives.

Putting together your revenue plan is relatively simple. Start by listing on a piece of paper all the products and services your business provides. Your next step is to then multiply each product or service by the prices you charge and then multiply that by how many units you expect to sell for the specific period (quarter, six month or one year period). Setting your revenue plan out in a table is all you need. What’s important is you set your plan in stone so that you can get to work moving closer to your desired outcome. I like to work with a simple table to begin with that gives you a snapshot of the year then using a more detailed spread-sheet I then break that revenue plan into a month view plan which enables you to be more specific when planning what strategies and tactics you will take action on in order to achieve your plan.

If the results on your revenue plan do not match the objectives on your gap analysis then simply make adjustments until they do. This may mean increasing your prices, increasing the number of times a customer buys from you or it may mean increasing the average amount a customer spends with you at any one time. It’s a simple road map for reaching your targets.
If you haven’t yet drafted an outline of a revenue plan, get started today and see the difference it makes in such a short period of time.

Example Revenue Plan Snapshot

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Now you are ready for the next step. Creating your sales process. A Sales Process will help you maximise your potential and achieve your revenue goals.

The sales process includes choosing the most appropriate channels for getting your message directly to your ideal customers, choosing the right marketing strategies and associated activities. I see this especially in retail, when usually the business owner relies on the most obvious channel – foot traffic. They hope for the best that the customer chooses them today. It’s like playing a game of chance. You have an equal chance that you will win, and an equal chance of not winning the customer. Put simply it is essential you understand your sales process. If your franchisor hasn’t a solid sales process in place then create your own.

Remember your success is dependent on you, not your franchisor. So what would your sales process consist of?

Typically your sales process would include these steps:

  • Identify your ideal client / customer
  • Generate leads
  • Qualify your prospects
  • Present your product or service to your prospect
  • Convert your prospect into a customer / client  (remember to upsell, cross-sell and down-sell)
  • Lead nurturing – Following up leads that have not yet converted
  • Delivery – Servicing your customers including following up

Defining your ideal client is the first step to attracting the kind of people you want to do business with and will greatly increase your revenues.

Without sales and marketing you would have no business at all. It would therefore be fair to say that sales and marketing are the lifeblood of every business. As Peter Druker once said a business has only two functions – marketing and innovation.

The key to dramatically increasing your sales and marketing results is very dependent on your ability to attract not just more clients, but more ideal clients.

So before you dive straight into your sales and marketing activities in order ot increase your revenues, it’s important to understand who your ideal client it. I liken the ideal client to a favourite toy you used to play with as a child. You may still play with the other toys however the bulk of your time is spent with your favourite one, in otherwords the one your prefer to spend more time with. This is the same for your ideal client. Sure you may have other client types but your ideal client is the one you want to focus the bulk of your time. The ideal client is the one who not only buys your product or service, they love your product and service. They literally share your passion for what you do. These are the clients who really want what you have to offer instead of just needing what you offer. Ideal clients mean fewer headaches, returns and complaints. They’re a pleasure to deal with and they’ll not only buy from you once, they’ll keep buying from you forever. Or if you offer a one-off product or service, your ideal client will be willing to tell their friends and family to buy from you. These are the type of clients who will spend more money with you than the average client ever would.

They will send you great referrals and give you unsolicited testimonials. When you properly and specifically identify your ideal client you will soon find you are working less and earning more, which is what your ultimate aim in business should be.

Knowing who your ideal client is will enable you to craft a message that speaks directly to them which will help. This can have a massive impact on your business allowing you to increase revenues, and have more time, more money and more freedom to do the things you love.

Time to Take Action

Before we move onto the next step and key area in your business take some time now to

  1. Complete a GAP Analysis on your business. Where are you now? Where you you want to be?
  2. Prepare your Simple Snapshot Revenue Plan and your Detailed Monthly Revenue Plan listing all your products and services and what you want to achieve
  3. Describe the type of customer you want to do business with.
  4. Describe the type of customer who you believe will give you the greatest return on your marketing investment.
  5. Looking at your current business which customers do you believe right now are the easiest to find, easiest to sell to and require the least amount of time spent on them?
  6. Describe the type of customer who will stay with you the longest and spend the most with you.
  7. Review your past marketing strategies. What have worked? What havnt? What else could be done to maximize your potential?
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