A great way to start the new year is to get clear on exactly how you can make your revenue goal number. A revenue plan is the perfect tool. There are various fancy software apps you can use, but typically a simple Excel spreadsheet is all you need.
Start by listing all of your products and services, listing one product or service in each row of a blank spreadsheet. Enter the description in Column A and use Column B for price.
Use Column C to enter the number of items you want to sell for the year. Column D should contain formulas to multiply the price by the volume to get revenue for each service and product you sell.
You can then sum the numbers in Column D to generate your projected revenue for the year.
Once the spreadsheet is setup, you can play with the revenue mix and see how selling more or less of a particular product or service may impact the overall projected revenue for the year.
Depending on what industry you’re in, you may need to make some adjustments to the above simplified revenue plan. If you sell project based work, you’ll need to list your types of projects instead of products and services, and you’ll need to make adjustments if a project will go longer than one year.
If you bill by the hour, you’ll need to calculate how many hours of service you’ll be able to charge for and factor that into the equation.
If you run product promotions and sales, you’ll need to figure a discounted price. I recommend you have an extra line for each product that sells at a discount and allocate the total amount you plan to sell at each price.
These are just some examples, but it is important that the plan reflects the way you price your products or services.
Use the 80-20 Rule
If you sell a lot of products and services, consider bundling them into subgroups to keep your plan cleaner and at a higher level. Only spend time planning at a very detailed level if you will gain more valuable insights from the results.
Working with Targets in Mind
Once you have an end goal, you can come up with the best approaches to achieve it. You can also being to track your actual results against your goals. Suddenly your monthly and year-to-date revenue reporting has much more meaning when you see how you are tracking against your target number.
Setting goals and consistently monitoring your results against those goals is the best way to move the bar and get your business to the next level.
Too many business owners just work to land the next project or client and don’t think strategically enough about the overall picture. When you have targets, you can come up with plans to achieve them.
A Prosperous New Year
Once you’ve created the plan, you can now take action based on insights you’ve gained. Perhaps you’ve got a whole new set of revenue resolutions to accomplish in 2015. If you need help constructing or analyzing this plan, feel free to reach out to us and let us know how we can help.