Create a Revenue Tracking Document for the Next Year
Our last step is that we're going to create a revenue tracking document for the next year because income goals on lee are good if you pay attention to them and you actually use them as markers for moving along in your business. So now that we've got our yearly income goal, we want to set monthly income goals for each revenue stream based on your promotional calendar. That promotional calendar exercise wasn't just because I wanted to give you a break from mass, it was as though it was nice to do that for a minute, it's actually, because you're going to use that to set your monthly calendar. One of the things that's really important to understand about this kind of model is that your sales are not going to be even for month to month, even if you were just letting traffic have been randomly, they wouldn't be. But when you use this kind of promotional calendar, you really start to kind of understand what months are going to be your revenue generating months. So you want to sit down and I l...
ike to create, I'd like to make spreadsheets it's fun, I swear it's especially fun when they do the math for you, so what I do when I'm creating my revenue tracking document. Is I create my goal for each for them up for the month, and then I have a space that I can fill it in, so I'm tracking every single month, and so I'll look at my promotional calendar to see what months I think you're gonna drive most of the sales to get me to my total. So for instance, and wholesale, if I know that, I'm going to do a show in february that I'm gonna go ahead and assume that most of my revenue was going to come in the month after a little bit the month after that, and then it's probably going to fall away for the summer. Now, you guys are going to want to do this for the whole year, but I wanted to make a thing that was showed up on screen, so I just did have but you're here, but you're into this for the whole year, then you're going to look at you're online and look at your promotional calendar for that as well and set your goals. So not sure why I did this as an example because this is really not reflective of my own online going on where I came up with these numbers, but like for me. I run an online sample sale in april that's one of my big promotions and that drives a lot more revenue than my smaller product launches throughout the year so april actually becomes a significantly larger month for me usually double to triple my my average so we'll look at my promotional calendar I'll say ok thank you anyway I'm probably not going to launch anything so it's going to be kind of a low month february my to a new product launch so it's gonna be a little higher march not launching anything that's going to come back down april I'm going to do that sample sale it's going to be a lot higher you may might come down june I'll do a product launch so it's going to be a little higher and I'll protect my revenue that way and then eventually this wall total up to your to your revenue goal and in the same thing okay, maybe I'll do a retail show this month and retail show that month so that's gonna be income so not gonna come in anywhere else does that make sense? So you're going to create this document for yourself and this is the end where if you on this class you can pause you could take a few minutes you can do this a spread sheet you could also get a calendar write it out market in your studio there's a lot of ways that you can sit down and track these numbers then you're gonna ask yourself what do I need to do to make these numbers a reality because of course they're not going to happen by magic wishing them to come true is not the case so we're going to take our calendar and we're going to take our promotional list we're going to make a list of major tasks that you need to publish to achieve your goals for each revenue stream every month so I give you a couple of examples if we go back here so let's just say that I know that I've got this show coming up and I want to make a lot of full sail money in march and april I'll sit down and I'll say ok in order to make this happen because I can't wake up march first having done nothing and expect to make fifty two hundred dollars in my wholesale business it doesn't work like that so that's what we're planning the sad in advance so I'll come in in january I'll say ok you know I've got my trade show booked so not to worry about that but I'm going to figure out ok this is when I have to design my postcard by get it mailed by design my catalogue he had it printed by do my mailing making those task lists they're going to generate the revenue and then I mean say you know what in may after the dust has settled from my last trade show cause I grew with the jazz era that month after it's a little hard to get real strategic work done all right, when I get to may since my trenches in february that's when I'll come back and I'll reach out to see who about their order at the end of february, the beginning of march and is ready for a re order so that I can keep this number going for, say, your online retail sales, that task list, maybe something like I am going tio spend, you know, three dollars a day in advertising trying to build my list on dh then I'm going to plan a strategic launch cycle in february where I'm going tio declare my new collection, I'm going to do a series of anticipation building social media, post to drive traffic to my list I'm going to build my list on, but I'm going to launch my collection now I realize that I just said a whole lot of words, and some of you are like, but how do I do that? Megan, there are plenty of classes here on creative live that show you so the how is a little hard for us to get into now because you've already covered it, so if you're like meghan, none of those things made sense to me. I got my fill, your products, retailers class and I make a living selling what you make class to really actually sit down and create those action steps, but what I've found and what I found in my own business and what I've seen with other people is that just challenging yourself to write these numbers down month to month and then asking yourself the question, what do I need to do to make these numbers of reality will put your business light years ahead of your competitors? He has remember when we started this class, there are what ten of you in the room or nine of you in the room, and one of you said that you do revenue planning on a regular basis. I think that's probably a pretty good estimate and what's happening, and people who are trying to grow their businesses one in ten are actually being strategic about this kind of thing. So if you do this and put that thought into being strategic that's going to put you ahead of ninety percent of your competitors and I got a question about planning for the holidays because I know some retailers make almost half their income during christmas. Do you find that that does that have a huge impact on your business, or is it? More consistent throughout the year oh boy I think this is a really good question because as we're filming the slide we just came off the holidays it is not that big of a percentage in my business it's probably different for some people tiffany you of a more gift herbal price point where does it fall on yours I am I get killed every year around the holidays and I always wish I could plan for that better cause I know that I could be making more money during that time but I end up I am capping out so it does kill me yes but I wouldn't say anywhere near fifty percent I would say I have double a month then I probably you know would have on a regular month yeah I think I like about twenty two thirty percent more is probably more realistic but what I have found for me as I have found two things I am very strategic about launch I think throughout the year my highest grossing month last year was april when I ran my online sample sale my second highest grossing month was october when I do my birthday sale those happened even be my only to sales of the year that's very strategic they drive a lot of revenue because my birthday is at the end of october I actually get a lot of holiday shopping happening at that sale so november is very slow for me online on I don't hate that I actually don't mind not trying to make a lot of money in november in december for two reasons one I feel like I'm trying to if you're trying to sell your trying to shout above the noise and two I actually like my family and I want to see them around the eyes so my revenue planning reflects the fact that I think about concern insistently making offers to my audience all year long so that I'm not dependent on november and december to hit my revenue goals and in fact my all mine sales revenue goal for last year I hit it I think halfway through november which point I was like cool anything else is gravy so the sooner you kind of you know don't wait to the end of the year to rely on that because even though yes people are buying more people are promoting more facebook ad cost goes up it just cost so much more in both time and energy to reach your customers so I wouldn't wouldn't rely too much on that but it is a really great question all right? So we're gonna create those lists of major task that you need to accomplish to achieve your goals and really what I want you to think about is what do I need to do to make money each month? This should be the question that's on the forefront of your mind now, the other thing, I want to point out that we talked about this a little bit throughout, but that tracking your stats makes it so much easier to revenue plan for next year. So a lot of those numbers that I told you the ballpark, I can tell you you had a ballpark thumb because I know my numbers and because I pay attention to other people and I run their numbers like I run what I hear susan peterson from freshly picked saying in an interview about her sales goals, and I divide that by the size of her social media last I pay attention to other people's numbers to tracking your stats makes it easier. So in addition to creating that goal sheet, I want you to make note of the stats that you're going to track this year and remember, we're committing to our businesses. So everyone promising, yes, meghan, I will track my stats this year. So yeah, you, karen all right, so stats that I want to pay attention to every month list size because I want to see the growth there, and especially because I'm running promotions. I want to see how the size of my list of the moment that I've run that promotion impacts that, so how big is your list, how many people are on your email list? How many stores are you selling to how many stores you have in your prospect list? Your store list turns over less, but your email list you want to track every month and then keep track of your promotional activities. So every time I run a launch sequence, I create a document and evernote, you could do it in google docks, you could do it and word you can keep it in a notebook, but I create a document and ever know, every time I run a promotion which tells me my list size, the current size of my social media audience, and then I keep track of how many things I sold, how much money I made, what was my average dollars per sale on and what percentage of my audience I converted during that promotion and so I can go back through every promotion I've run, go into my evernote, pull it up and see my sales data. The reason that I can stand on stage and tell you lots of things is because I do that track my numbers, and I know you also want to keep track of your average retail order size and your average wholesale order size. So I have a spreadsheet that I use, so I track my online sales and I have a separate tab on it for a z s, which is average dollars for sale, so look att how much money I made that month, how many orders that was and what the average dollars for sale were because I mentioned at one point feels like forever ago, but I mentioned that the number one thing that I'm doing to grow my business is I'm working, I'm bringing up my average dollars for sale, I want to get my customers to spend more, so I'm always tracking that number and that same thing with your wholesale order size keep track of the sizes of your orders so that you can find that average, because, again, it makes revenue planning so much easier. Then you're also going to figure out your stats for the year your annual stats somebody's going to repeat, so I've got my monthly eighty s I'm going to do it annually to my average dollars, my average retailer size, my average wholesale order size, I'm also going to do dollar value per email subscriber. I only do this once a year because I don't have a repeat recurring audience, so at the end of the year, I look at where my email list is that I divided by my amount of sales, and again, I realize not all my sales come from my email list, but I knew enough about my stats, you know, that it drives most of my sales so I can figure out that order value calculate that out the near dollar value in order total per existing store. So how much are your stores spending with you and then the percentage of store prospects that were converted into accounts. So how many of your warm list turned into accounts? How many of your cold list did you contact? They turn into accounts, figure out what presented you're converting because it in the future that tells you okay, if I want six more stores now, I know if I need to contact two hundred or if I have to contact six hundred because that's a very different amount of effort, right? So you want to keep track of how many people were reaching out to and how many of those converted make sense? We're getting any questions online? Yes, we have several questions, maybe a little bit off talking about the right amount to anyway, so a few people were interested in sonia. These question, which is what's your take on promotions for discounts like some people say don't offer them because people will expect to get them all the time. Some people think you should offer them so I use the word promotion not to be in discounts but to me any time I'm running a kind of building anticipation and launch sequence as faras discounts go, I run to sales a year I do my online sample sale which is these products that I want to get rid of I had a fairly deep discount, but that sale only goes for twenty four hours. You log into a secret play, you don't log and you just click a link to a secret page they by twenty four hours later it goes away, then I do my annual birthday sail once a year. Everything in my store is how old I am off so certain percentage off I'm going to cap that when I hit a certain age, you don't feel manageable right now, but at some point I'm not going to be seventy evening like today, everything seventy percent. Honestly what? I'm seventy, I wanna work that hard for seventy percent off, right? I run to sales a year and very occasionally I think maybe once or twice a year, I throw a surprise twenty percent code out to my list, that is it because you know what happens then? That makes those sales are really big deal, so I think it's good to run them, but very, very, very sparingly, and I do not give a discount code out for mailing list subscribers, and jake wanted to know what is more profitable a retail trade show or a wholesale show. Why would a first time trade show exhibit choose one over the other? So it's a it's not a retail trade show so it's a retail show where you sell directly to customers for its a wholesale show where you're selling directly to stores there's no real way to answer that because there's such a huge variation so here's the thing retail shows encompass everything from your little mom and pop local to your indy craft show to some very big high end shows like the american craft council show here in san francisco so there's a huge range so you have shows where people are making three hundred dollars which is probably even their booth e teo I know people who you know can take home twenty or thirty thousand or even more dollars at the a c c san francisco show so I can't tell you what's more profitable because there's a huge range there and the same thing even with trade shows there are better quality trade shows but what I will say is that if you pick the right trade shows they will grow your business more over the long term because it's not a one and done by when you pick up that account that account those accounts without order regularly so I think over time trade shows become a better investment of your money unless you're getting into really really high end retail shows perfect any other ones are we good there's one final one of the things that will help this have this person again to makes impressions she has a forty two hundred person list and doesn't email about once a week, but the value per person is only five dollars and that's decreased by half this year. Wow, and so she feels like she needs to connect rather than just get more people on the list. So yeah, if you have any thoughts about that you've been talking about listen eso so that's a great question and one of the things that I would say is that shifting the way that you email that list I'm so instead of saying once a week I'm doing something that feels very perfunctory, changing it to this sort of build anticipation and cell cycle can actually bring some energy back into your list so I might send one to two to anticipation e mails why we're not asking them to buy at all and then send one where I'm saying here's something new go by the other thing that you can do to sort of engage with your list is, first of all, with a list that size you could absolutely split test to see what your best subject lines are, so you should be slit testing of that size to try to get your open rates back up because when I'm guessing is your open rates have dropped really far so split test your subject lines to see what's going to get more people to open I also use a strategy where if I've got an email that I really want to see people take action on I will send it out one day I will wait twenty four to forty eight hours and I will send it to everybody who did not open the previous email I'll send the same email with a different subject line that second email never gets this high of an open rain but it usually gets about another twenty percent you know ten twenty percent of my list open who didn't open the last one that's a really good way to do that the other thing that you can do to reinvigorate your list is actually engage with them so email them and ask them to respond back to you ask them a question get them to engage because that's going to build a little bit of good will and so it's not always about like the sell sell sell get to know them a little bit better and then that will help you make better offers to them to that's a great question awesome perfect so the more you can understand what drives your sales the easier it is to predict your revenue for the future that's why tracking the stuff is so important because it's what lets you know what to focus on as you move forward in your business