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Guide to making Profit

LEADS x CONVERSION RATE = Number of Customers

Average Sale Price x Frequency = Turnover

Turnover – Costs = Profit

 

Things to consider which influence the above elements

 

  1. What does your business plan say you will be doing?
  2. What are your key performance indicators?
  3. Is it clear who your target market is?
  4. Is your marketing going to people who will buy your products or service?
  5. Which of your marketing works and which doesn’t?
  6. Do you need to change your marketing mix to keep up with your target market?
  7. What is your Unique Selling Point?
  8. How many potential customers turn into paying customers?
  9. Why don’t more potential customers turn into paying customers?
  10. Are you the cheapest or most expensive in the market and what message does that send? Can you live up to your customers’ expectations?
  11. How often do you increase your prices?
  12. What is the cost of acquiring a customers?
  13. How many times does a customer buy from you and can you get them to buy more and more often?
  14. Do you give your customers a great experience?
  15. Do you know what you are getting for the money you are spending and when did you last review all your costs?
  16. Find a mentor to help keep you on track
  17. Keep learning, your marketplace is continually changing and you don’t want to get left behind
  18. How much do you spend finding a customer (your time is also money) and what is their lifetime value (amount spent x frequency p/a x average no of years remaining a customer). Would it be worth investing more in finding customers?
  19. How do you know when you have lost a customer? And do you know why?

 

Mark Fordham

Business Adviser