I often find that going back to basics helps put things in perspective.
When we know how much it costs us to open the doors of our business we can get clarity about how much we need to sell and deliver each and every day.
- Add up all the money you pay out of your business every year whether you sell anything or not. Examples include your rent, the wages (including yours), marketing, electricity, insurance, interest, loan repayments, taxes etc.
- Now divide this by the number of weeks you work each year and the number of days you work each week.
- If you know how much you make on average from each sale you can work out how much you need to sell every week and every day.
Here’s an Example
If your expenses are $ 365,000 of expenses you would divided this amount by 48 weeks (Remember you don’t work 52 weeks a year) which would work out to $ 7,604 per week.
- If you divide $ 7,604 per week divided by 5 days per week (If you work Monday to Friday) this then equals $ 1,520 per day.
- If you want to break that down further, you can work out how much it costs you per hour to open the doors of your business.
- If you divide $ 1,520 by 8 hours this then equals $ 190 per hour!!!!
If you make a 50% profit on each sale, then you know that you need to sell at least:
- $ 380 per hour
- $ 3,040 each day
- $ 15,200 each week
Now you know how much you need to sell each hour, day and week you can start to measure it and stay on track to make the money that every courageous entrepreneur deserves!