Do you know how many customers you need (or how many sales you need to make) today to make a profit?

How about to break even?

Do you know how long you’ll have to work this year just to pay your taxes?

What about how many prospects you need in your sales pipeline to generate enough customers to make your profit margin?

What is your profit margin?

If you’re struggling to answer these basic questions, you’re not alone.

But you can jump your profits immediately simply by actually knowing the numbers that lead to them.

In fact, the majority of the most profitable and highest growth companies are those that know their numbers at every possible level. They know very clearly you cannot manage what you do not measure.

The key to knowing your numbers is simply that:  knowing and understanding exactly what your business needs to produce to give you the profit you need to survive and grow far into the future.

Most business owners I’ve coached over the years have no clue what their real numbers are. They have a vague guess or a “gut feel” – but they don’t really know – mainly because I think they don’t want to be faced with the reality the numbers will ultimately show them.

To prosper, you’re going to have to put the fear of numbers behind you and embrace the reality they will reveal to you. Not only will mastery of your numbers give you an edge over your competition – it will give you the power to make better decisions in real time, regardless of the economy.

What can numbers tell you?

First, numbers will tell you where you are right now. Beyond revenues and expenses, your numbers will show your profit margins, as well as vital figures relating to sales. If you know how many people come through your doors a day and how many actually buy something, you suddenly have a handle on the number known as your “sales conversion rate.”

By that measure, if you know you always convert 15% of your prospects into a sale, and you know you need 12 sales to profit – you can easily determine you’ll need 80 people through your doors on average to be profitable (12/15% = 80).

Now the question becomes, “How can I get 80 people through my doors?”

That’s another column, but at least you know what you have to do in volume to make your profit.

Second, numbers will guide you where you want to go. Are you looking for an extra $10,000 in gross profit on a 25% profit margin? You’ll need to generate a turnover of at least $40,000 ($10,000/25% = $40,000).

Are you a professional who charges $100 an hour who now wants to double your income? You might need to determine whether it is better for you to charge $200 over 2000 working hours a year (highly unlikely given you can’t charge every working hour) – or charge $400 multiplied by 1000 working hours a year (meaning you can take some time off once in a while).

In either case, the numbers will give you an indication (based on your market and profession) what can work for you. They will also show you where you might need to revamp your business so you can get to your targeted revenue (as in finding additional and alternative revenue streams for your professional service to get you to that $400 an hour goal).

Finally, numbers will help you form a plan to get there. Sometimes, the numbers will reveal your current skills and market conditions – or your current mix of products and services – just won’t support your revenue and profit targets.

That’s not bad news – it’s just news. But it will help you determine what you will need to do to improve and enhance your professional skill set – or revamp your product and services mix.

The numbers might show you that you can afford to hire a great sales person to sell and two additional administrative people to handle the books while you network or leverage your highest skills to build the business in new and innovative ways.

Can you present a workshop and have an entire “back end” of your own private label products? Could you do that if you were in your shop 12-hours a day? Probably not. But those opportunities wouldn’t ever present themselves without a good handle of the numbers of your particular business.

So what do the numbers look like in your company?

If you are in sales, how many calls will you need to make next week to get the number of appointments you’ll need to make a sale?

If you are in retail, how many customers will you need in your shop to break even and make a profit? And how big will that profit need to be?

Take some time – right now – and introduce yourself to the past, present and future numbers of your particular business.

Because if you don’t master your numbers, your numbers will surely master you.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

Sometimes, it pays to change your business for the sake of change.

Other times, you have to change your business because the market tells you to. And if you don’t change, you’re dead.

Like it or not, we are living in those times.

Market forces worldwide are causing a whirlwind of creative destruction for businesses and their owners. The question is, how will you react to our current economic circumstances, and how can you make the money you’ll need to survive?

In past columns, I’ve talked about seeing the world as entrepreneurs do. This is simply a matter of looking at events (no matter what they are) and reacting not in a negative way, but rather in a way and from a perspective that uncovers value, upside potential and opportunity.

With that in mind, I thought it would be a good idea to devote a series of articles this year to getting “Back to Business” – with proven strategies and tactics that have transformed companies around the world and in every type of economy.

Including downturns like the one we find ourselves in now.

Not only will these strategies help re-adjust your entrepreneurial attitude, they will also help your business survive and thrive immediately – and will serve as the foundation for continuing growth well into the next economic spring and summer.

So how can you gain some clarity for your business amid all the media noise and pessimism?

Realize that the needs of your customers and your market are different than those needs were a year ago. Or even six months ago.

Simply put, you’ll have to adapt to those different needs and change your business in the direction of meeting those needs in order to survive.

The new vision for your business should be highly focused – and scaled to what your customers truly want. In these times, success won’t necessarily be based on what you want to offer, but rather what the market is telling you to offer.

You will also need to put an extreme focus on profitability. This may mean scaling back your plans for 20 locations nationwide to 10 locations that run on higher profit margins. Now isn’t necessarily the time to overstretch; in fact, doing so and getting caught short of cash and/or human capital is death for any business.

A laser-like focus on profit and operations will pay off big during the next economic spring. Not only will you be better positioned financially than your competition, you will develop the discipline to stay close to your core business.

While other companies will use the next boom to chase after any market or sell any product – your efforts now to pare down and narrow your focus will keep you from making the same mistakes in the future.

In addition to a changed mindset and business focus, you’ll need to commit to marketing at every level of your business. This doesn’t mean buying high priced ads in newspapers or on TV. It means creating a marketing and sales oriented culture that runs your business – from how your team answers the phone, to how they greet customers and guide them through the sales process, to developing a solid customer data base.

While I’m sure you’ve heard all of this before, you’d be amazed how many owners don’t do the simplest things that could make them successful. For instance, our company has discovered only about 7% of all business owners know what their break even is on a given day – let alone over the course of a month or year.

Do you know yours? Isn’t it time you found out?

Focus, marketing mastery and numbers mastery will be crucial if you want to ride out this downturn. Put another way – it’s not your competition that is forcing the game this time. It’s the market – and although the market’s judgment is harsh, in my experience it is always fair.

You simply can’t run a successful company without profit and without systemized ways to grow your customer base and keep them coming back.

Leverage, as many companies have brutally discovered, is great when the economic tide is rising and lifts all boats.

In a downturn the squeeze of debt on cash flow and overstretched operations is ruinous. Just take a look at the list of victims in the “destruction” part of the “creative destruction” equation and take note of the seemingly blue chip companies that don’t exist anymore – and you’ll understand the value of cash in this kind of environment.

The upside of all of this is that right now, the world’s economic stage is being set for the next big boom. When will it happen? Who knows?

The point is that now is the time to get your own basics right so when the economic recovery hits full swing, you’ll be ready to capture even greater profits and success.

So start now and take the next several days to develop a new vision and plan for your company – based on what your customers – and the market – is telling you.

That feedback could be the foundation for some of the best (and most profitable) decisions you could ever make for your company.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

Yes, saving a wage is killing your business.  And, I mean that literally …

I know. I see the accountants saying, you have to run lean to get a decent profit, right?

That’s partly true. It’s also true you need to grow to make profit. You can’t cost cut your way to a fortune.

In business, it seems there are always two sides. For example, if you’re an owner of a retail business, you need to get product on the shelf and also get product off the shelf.

In a service business, you need to deliver the service, and you also need to manage your customer base from the sales and marketing side to build a demand for the service.

So, as an owner, faced with dealing with both sides, which of those areas should you focus on?

If you want your business to be big, you need to focus on getting the business, rather than managing it once it is brought in.

That means you have to get out of doing anything in your business that doesn’t contribute directly to both top-line and bottom-line revenue.

It also means you have to start hiring people to do the things you may be already doing – things that may be more comfortable for you than selling.

And don’t think you can’t afford to start paying those wages. Truth is, you can’t afford not to.

See, many owners hide behind the “managing” side of things, preferring that process to the sales side. They spend hours doing the books or creating spreadsheets or even answering phones in the misguided belief that “busy” equals “business.”

The reality, of course, is that sales equals business, and nothing in business happens until a sale is made. Many owners also have no idea how much their time is actually worth – causing them to engage in tasks or activities that do little or nothing to grow the business.

The way forward is to start delegating routine tasks to wage earners so you can start focusing on the top-line activities that will drive revenues. You need a plan to start, however, because delegation without a system is abdication. And for most owners, there’s simply too much abdication in their companies for anyone’s good.

How do you start? By following these five steps to make sure you are fully engaged on the “bringing in” business side of things at all times in your own company.

1. Know what your time is worth. First, you need to define your value in your business over time. What’s it worth? Twenty, $50, $200 an hour? What do you currently charge for your time in your business? What should you charge? These are key questions to defining the types of tasks you should be doing to leverage your own time and value in your company.Once you know your value, you can easily see how certain tasks can be outsourced to leverage your time.Say you’ve determined your time is worth at least $100 an hour. Will you still mow the lawn, iron clothes or clean the pool at home? Not if you can get those tasks completed for less than that rate – and you will soon discover you can.For your business, you can benchmark this rate against the “Lifetime Value” of your average customer. Say you have a customer who will spend on average of $5000 a year with you and will be a customer for 5 years.

   That customer’s Lifetime Value is $25,000. Now, at your rate of $100 an hour, will you continue to answer phones or work up your monthly financials?

   I’d hope not. Especially when your time is better spent finding more “average” customers.

2. Figure out where you spend your time. Keep careful track of how you spend your time in your business for a week or two, and you’ll have a better handle on how you can adjust your tasks and activities in more profitable ways. Most owners will find very little time goes into actually getting sales, while most of it is spent on delivering the product or service, administrative or managerial tasks and functions. Remember the 80/20 rule:  80% of all results come from 20% of effort. And if 80% of your efforts are managerial in nature, you can immediately see where your sales results are at.
3. Delegate routine, administrative or basic tasks. Once you have a handle on how you spend your time, start to find ways to systemize your most routine functions and delegate them to wage earners. Start from the bottom up, and make sure you have a system in place before you place an untrained person in a position.
4. Get more training – for yourself. Take an honest assessment of your sales and marketing abilities, and if you need help – go get it. You, of all people in your company, might be the biggest beneficiary of additional sales or marketing training. You can’t get additional learning and education if you are tied to the office doing books or answering phones. Again, pay the wage to someone who can do it better and for less money than your time is worth, and brush up on the skills you need to boost your business.
5. Just do it. Get off your backside and actually start to engage with your customers. Strike up a conversation. Call and ask how they are doing. After a while, they’ll be impressed enough to start referring your business to others – which is by far the best way to leverage your “sales” time in any business.

Then, once you get enough referrals coming through your sales pipeline, you can once again become a manager – this time of a fortune.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

I have a very simple formula for success in life and I want to share it with you.

But I have one condition … first you have to understand these two things … just because it’s simple doesn’t make it easy, and often the simplest things are the most brilliant.

If followed properly, this formula will yield amazing results in your business and your life.

It boils down to this:  In order to HAVE anything in life, we need to DO something to achieve it, and in order to DO the right things in the right way at the right time, we have to BE the right person.

So, what is it? An easy formula that looks like this:  BE X DO = HAVE.

If you want wealth, you must invest. If you want love, you must first give it. If you want respect, you must earn it. No matter what, you need to DO something in order to HAVE something.

But DO-ing is not the only thing you need to change in order to HAVE something. You must also BE-come the person who would DO these things well and thus HAVE the things you desire.

You must also develop the identity, beliefs and values of the type of person who has those things has.

That’s why most – if not all – people who come into great wealth very suddenly find themselves worse off in just a few short years. Those people never developed the inner beliefs and values to match their outer reality. They never BE-came “millionaires.”

Business is no different.

In order to HAVE amazing customers (and amazing businesses need amazing customers), you must develop your business into one that will attract amazing customers.

What is an amazing customer? It’s specific to your business and only you can define for yourself the characteristics of your amazing customer. Perhaps it includes a customer who always pays cash. Maybe one who sends you lots of referrals. You must first identify who your amazing customers are and what those customers want. You must know how those customers shop. Then, you can BE-come the place where those customers want to shop.

Once you are that business, you must DO the things that make your customers know yours is the perfect business that benefits them – so you HAVE the results you want.

So how do you develop the mind-set and the skill-set to maximize the BE X DO = HAVE formula?

Work at it. It’s as simple as that … but simple is not always easy.

First, you need to train, or re-train your brain. Just like our bodies need regular exercise, our minds do, too – or else they default to negative and unproductive thinking.

You also must remember that DO-ing is as important as or even more important than BE-ing.

I often say you can’t sit on a mountain-top and “OHM” your way to wealth. Look at it this way, if you continue to do what average the person does, you’ll get what the average person gets … and in today’s world, average isn’t that great. So you must be prepared to do the extra and the “overtime” to HAVE great results.

You also need to start focusing on what you want to HAVE versus what you don’t. Goal-setting becomes easy when you focus on the positive things you want in life, rather than all the things you don’t want.

It’s also one of the more challenging things you can do – because it forces you to start thinking about what your ideal life might look like.  Challenge yourself to dream, then set your goals, then a plan and then take action …

To jump start this process, here are four things you can do to start working on the BE-ing and DO-ing parts of the formula. To benchmark things, rate yourself today on how you are BE-ing in terms of our beliefs, values and attitudes, and how you are DO-ing in terms of your skills and day-to-day activities.

If you rate yourself 4 of 10 for both BE and DO, your current HAVE is a 16 … and there is obvious room to improve to get to 100.

1. Idealization:  Start stretching your mind with possibilities. Choose your ideal life and how you want it to be, whether is it being a great parent or having your own jet. Choose it as already yours, and accept your new thoughts as true. Saying you “want” something causes your mind to think you don’t have it – meaning you won’t get it.  Remember though, this is not a 1-year process, it takes time to re-train yourself.
2. Visualization:  Relax 10-minutes in morning and 10-minutes in evening and picture your ideal life as real. Visualize and accept your ideal self as real and believe what you want is already yours, because at the subconscious level, your mind doesn’t know what is real and what isn’t. And keep planting those “seeds” of positive thoughts every day.
3. Verbalization:  Create a series of at least 20 "I AM" statements that you speak or shout out loud every day. Give them and yourself energy, passion and vibration. Again, you are re-training your mind to accept a new reality – yours.  And yes, that little voice in the back of your head will disagree for the first few weeks, months or maybe even years, but you have to start somewhere.
4. Materialization: Be aware of your changing outer environment as the seeds you’ve been planting start to manifest – especially as you do the extra work you need to do to make it all happen. Realize it’s not a week long process … but rather one that happens over time. Your own energy and emotions about the goals that matter most to you bring those goals to you faster … so become a passionate advocate of the best and only product you really have – you.

Be, Do and Have. Three little words that are part of a simple formula that can change your life. Now that you know it and have some basic tools you can work with – the rest is up to you. So go out and make it happen!

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

As a business owner, I'm always amazed at how many opinions people have about networking.

Opinions that are backed with absolutely no substance, no research and no "bloody"  understanding at all.

You would literally be amazed at how people’s opinions are so polarized by what is such a fundamentally solid business model.  A model now taught in Universities and colleges across the planet.

In fact, if you do your home work, you’ll see that Network Marketing, or Direct Selling or Multi-Level Marketing has taken a massive about face in the last 10 years.

Industry figures show a 91% growth, more than USD$100 billion a year globally and, investors such as Warren Buffet and Richard Branson owning companies that use these marketing methods.

Yet, “so called” consumer advocates, pathetically weak investment advisors and every day people who have literally no experience, have done no research and have no grounds to be even thinking of making comment are doing you a disservice by possibly turning you away from a model that has proven to help millions create extra income.

As Jim Rohn puts it so well, you go to work during the day to pay the bills and at night to build your wealth.  Then you ask why Robert Kiyosaki calls it the “perfect business” and even wrote a whole book about it titled, “The Business for People who like Helping People.”

Then we go to noted economist Paul Zane Pilzer who has two books on the subject and you start to see that those who bother to educate themselves find that this industry is huge and full of amazing growth companies.

Here’s how it really works …

You’re a new company and you don’t have the tens or hundreds of millions of dollars needed to advertise, stock and sell your products through retail channels.  In reality, just the advertising budget alone kills most companies. Look at Big Kev.

So, the next best form of marketing is word of mouth.  And, if you want word of mouth to work, you have to have both a great product and the ability to pay the people who spread the most word.

That my friends, in simplest terms, is word of mouth or network marketing.

You pay people to spread the word.  Now, many will call it pyramid marketing.  Again, do your research, this is just not factual.  In a pyramid, you buy directly from the person above you who marks up the product (if there is one) and then you have to mark it up to the next person.  For many good reasons it’s illegal.

On the flip side, in Network Marketing, everyone buys directly from the main company, and everyone pays the same price.  Then, the company rewards those that spread the most word with the most compensation.

And, why do people get so upset and emotional over this … ?

Simple, it’s like any other business, if you do nothing you get nothing.  If you do a lot, you get a lot.  Some people join, do very little and wonder why it didn’t work for them.  They then, to justify their experience, state that networking doesn’t work.  It couldn’t possibly have been them.

Well, the same could be said for going into your own business, the same for investing in the stock market, or property for that matter.  Let’s be real, in life if you do nothing, you get nothing, if you do a lot, you get a lot …

If it seems I’m mad, you better believe it. If someone needs to stand up and be an advocate for this industry then let it be me. I am sick and tired of the Australian tall poppy rubbish. It has got to stop.

This industry has the ability to in a fairly short space of years help the average person create an extra $1,000 a month for a very small investment of money and a reasonable investment of time.  Something I’d love to see the people who knock it show you how to do.  All I want you to do, it do the research, don’t let these morons impress you with their attacks, let the real information speak for itself.

Go to www.networkingtimes.com and read as much as you can, get some books, watch some of the DVD’s.

Whatever you do, if you are in networking or thinking about getting in, listen to people who have done it, look to people who have achieved and then, judge for yourself the difference between informed and ignorant.

This article is reprinted courtesy of My Business magazine, one of the leading business publications in Australia.

Today I want you to really understand what a customer is worth, and not just your best customer, but an average customer ... what is their lifetime value ... ?

Think of this, how long does an average client buy from you, how many times a year, for how many years ... ?

A simple example, my favorite Las Vegas restaurant, N9NE, steak house at the Palms ... now, I am no where near an average customer, I'm a great customer, but think of this, I've bought at least 100 people in to taste Chef Barry's creations ( it's now in the Top 100 restaurants in the World).

Think of that, if Chef Barry's average customer or your average customer bought in only 5 referrals, how much are they worth?  Then how much are the 5 referrals worth and then again what if the 5 referrals on average bring in 5 referrals ?????

What does the Lifetime Value of a customer add up to for you?  Do the math and then work out what it's worth for you to keep the customers you've already got?   What are 3 things you can do to keep the best 20% of your clients/customers doing business with you?  Even knowing them is a start.

Then, what's it worth to BUY a new customer?  More on this one another time ...

All the Best ... Brad Sugars