Hello fearless community!
I’m so pleased to be able to offer you sound business tips every Tuesday.
This week I cover Revenue Management – are you FULLY INFORMED?
Revenue management is a huge topic and a very important topic to consider in your day to day business operations. Without cash, there is no business…
Let’s start by asking some questions to evaluate where you are in terms of revenue management;
- Do you feel that it is easy for you to make ends meet every month?
- Do you know if you are making a profit?
- Are you forecasting revenue according to a formula and analysis of your specific business needs?
- Are your sales growing?
- Are you managing your expenses very carefully and constantly reevaluating where unnecessary costs could be cut?
If you answered no to more than two questions above, you might need some guidance in terms of financial management in your business. I have no doubt you either have an accountant or financial manager on staff, but the fact remains that YOU, as the owner or manager, need to understand the basic principles of finance and revenue management if you are to grow your business.
Today I would like to share with you 3 key formulas and benchmarks for your business.
- Profit to turnover = profit / turnover. This will give you a percentage. A good return would be 10%
- Retail percentage = retail sales / turnover. This will give you the percentage of retail on your turnover. If you are in a busy shopping centre or home salon, you should aim to achieve at least a 40% retail percentage and if you are in a destination spa/salon you should aim for at least 30%.
- Expense to turnover percentage = expenses / turnover. This will give you the expenses to turnover ratio. Monitor this to ensure the number stays the same or reduces. If it is increasing, your expenses are growing faster than you turnover and you could be heading for trouble.
These are just 3 basic formulas for our Industry.
The topic is extremely broad and as such we have dedicate a vast amount of content to it in our Business Management Course, including many downloadable templates to use in your business immediately!
Make the commitment to invest in yourself by signing up for our flagship Business Management course and join our community of members from 6 different countries!
We share best practice ideas and keep each other motivated and upbeat, especially during the crisis we’re in. The course is divided into 7 modules, with each taking 5 weeks to complete. Two live coaching sessions per module ensures you remain up to date and engaged.
Make the commitment to run a better, more profitable business!
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Become OBSESSED with your business and OBSESSED with success!!
Till next week,
Marisa xxx