This is an essential part of your business – this is the skeletal frame you are working with. Your numbers are very important as they determine a lot of things – from expansion, to promotional offers, to continued stay in business. You must be deft at numbers and if you are not, you should get the services of an accountant. Knowing your numbers let you know your status and how you can get better.
Some of these numbers will be discussed below:
What is your working capital? You should know the amount you are working with. It is the investment of the capital that you make profit from. If you don’t have requisite capital, you should get as you can’t enter business without something. Your working capital increases as you grow. You may enter the business with $5000; in a year or two, if business is doing well, you should be looking at a working capital of about $10,000 – $12,000.
How much is your revenue? You should know how much you are raking in, both in gross and net. Your revenue can determine if you should stay in business or not. If your revenue is lower at your working capital, you may be running at a loss. You can generate more revenue by improving a thing or two in your business and serving your customers better.
How much do you gross in profit? Your gross profit is the bulk of the profit you made before making several deductions such as taxes, capital, insurance, etc. Your gross profit is as important as your working capital as you need it to give you the overall result of the efforts you have put into work. After making all deductions, what will be left will be the net profit – this is the real profit.
What is your profit margin? This is simply your net profit. This is the profit after deducting all related costs. This profit is what accrues on the capital. This is what the business owner lays hold to as the return on investments. The profit margin can either be reinvested or taken as dividends. It is however in the best interest of the business to always invest the profit margin when the business is still at its cradle.
What are the general expenses and the administrative expenses? General expenses are the expenses incurred from several aspects in the running of the business. Administrative expenses are costs incurred in the running of the business. It is very important to have these noted as they must not be more than the real profit. These can be cut where possible to give way for more profit or to invest to bring more traffic.
Do you have plans for compensations? Compensations happen where there is a fault and remedy is needed. As a reputable business, you should compensate as appropriate. It is better to accept a fault and pay compensation than to allow a court case that will cost money and even affect the brand name. Thus, compensations must be incorporated into your numbers. Have a reasonable budget for this. Try to do everything right so you can always save the money. However, make it a point in your budget.
Incorporate marketing expenses. Advertizing is essential but not cheap. This is the same with other activities that go along with merchandizing. Know the estimate of what it entails to advertize and sell your products and services. This is a major cost which you may not afford to cut. To get more profit, you have to invest a lot in this part as it is where the main action of making money goes on.
How much do you spend on research and development? Research and development or R&D is the aspect that deals with work directed towards innovation, introduction, and improvement of products and processes. This is a very important aspect especially if you are involved in manufacturing. You should have a working budget for R&D as it is very essential. However, you can’t really cut the budget here as you can’t afford to tone it down at R&D.
Thank the customer for the review and be specific. After getting feedback from a customer, show your gratitude and specifically address issues that need addressing. It is good business practice to get your customers to feel special. Feedbacks can be very helpful as they give you your picture in the customer’s reflection. You should constantly strive to get reviews as they determine a lot.
Use the business name and keywords in your review response. Let your business names and keywords always resonate in your correspondences and footprint on the internet. This help you to imprint your image into the subconscious of customers and you will always come to mind when they need that product or service you sell or render.
Add little marketing to your review response. Be an ardent marketer who employs every opportunity to make a sale. In the mail wherein you are acknowledging the receipt of the review, advertize some products. You never can say; there may be a product needed that will be among those advertized. Also announce promotions and offers in these mails.
Invite customer to do something in your response. To show that you care about a customer’s opinion, you can schedule a meeting where you get to meet the customer and have an open and honest conversation. This can help to build a relationship which can be highly beneficial to both parties.
In conclusion, it is good to know one’s numbers. Knowing your numbers tells you your state and points where you have got to improve to you.
In other conclusion, feedbacks from customers are useful tools in knowing your state and what to work on. It is highly beneficial to exploit every opportunity to sell and create a relationship with customers. Appreciate their efforts at attending to your requests and implement their views as appropriate.
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