In your business plan, you must have a good idea what kind of sales you are going to generate before you open your small business. That's revenue and without it, you will struggle.
How are you supposed to do that? Good question. The answer is rather complicated so stick with me.
You have to know the following:
How many transactions you are going to have each day
How much each transaction is worth
What the resultant revenue is going to be
So, let's start with transactions. It's Monday in February, how many people are coming into your place of business, and how many of those are buying something? How about a Friday in July? Get it? You have to break down a full year into quarters or seasons. Then you have to determine how many good days - week-ends and holidays - you will have in that season and how many poor days you'll have. So in the summer, you'll have say 75 good days and 17 poor days. In the winter - unless you are in Cancun - you'll have the reverse or close to it.
What you have to determine is how many transactions you are going to have per season. In the summer, for example, you'll have 75 days of 200 transactions and 17 days of 100 transactions. Do the math for each season. Each season will be different. You now have the number of customer transactions you'll have for one year. It is during this process you will get to 'know' your business. You have to have a very clear picture as to what will happen in your business. Think back to when you were developing your concept.
The second step is to estimate how much each transaction is worth. How much is a person spending on a poor day in February versus a person spending on a good day in the summer. And those numbers will be different. They will vary from season to season. Do the work. You'll thank me later.
The last step is to work out a formula that looks like this:
75 good summer days X 200 transactions X $20 = $300,000
17 poor summer days X 100 transactions X $15 = $ 25,500
Total summer sales = $325,500
So, you have your summer revenue just like that. Do the work on the other seasons and you'll have estimated your first year of revenue. Wouldn't you like to know that number BEFORE you open? I'd say yes. Now step back and look at the year's revenue and see if it is what you thought you'd do.
If it is too low you can do one of three things:
You can raise your prices
You can purchase products that cost you less
You can do a lot of marketing
There you have it. A revenue forecast you can actually use. There is, as you can see, a measure of guesswork involved whenever you estimate revenues before your open your small business; but if you are experienced and know your market, you will be surprisingly close to your actual revenues when you open your business.
How are you supposed to do that? Good question. The answer is rather complicated so stick with me.
You have to know the following:
How many transactions you are going to have each day
How much each transaction is worth
What the resultant revenue is going to be
So, let's start with transactions. It's Monday in February, how many people are coming into your place of business, and how many of those are buying something? How about a Friday in July? Get it? You have to break down a full year into quarters or seasons. Then you have to determine how many good days - week-ends and holidays - you will have in that season and how many poor days you'll have. So in the summer, you'll have say 75 good days and 17 poor days. In the winter - unless you are in Cancun - you'll have the reverse or close to it.
What you have to determine is how many transactions you are going to have per season. In the summer, for example, you'll have 75 days of 200 transactions and 17 days of 100 transactions. Do the math for each season. Each season will be different. You now have the number of customer transactions you'll have for one year. It is during this process you will get to 'know' your business. You have to have a very clear picture as to what will happen in your business. Think back to when you were developing your concept.
The second step is to estimate how much each transaction is worth. How much is a person spending on a poor day in February versus a person spending on a good day in the summer. And those numbers will be different. They will vary from season to season. Do the work. You'll thank me later.
The last step is to work out a formula that looks like this:
75 good summer days X 200 transactions X $20 = $300,000
17 poor summer days X 100 transactions X $15 = $ 25,500
Total summer sales = $325,500
So, you have your summer revenue just like that. Do the work on the other seasons and you'll have estimated your first year of revenue. Wouldn't you like to know that number BEFORE you open? I'd say yes. Now step back and look at the year's revenue and see if it is what you thought you'd do.
If it is too low you can do one of three things:
You can raise your prices
You can purchase products that cost you less
You can do a lot of marketing
There you have it. A revenue forecast you can actually use. There is, as you can see, a measure of guesswork involved whenever you estimate revenues before your open your small business; but if you are experienced and know your market, you will be surprisingly close to your actual revenues when you open your business.
Tidak ada komentar:
Posting Komentar