The first year or two of a business can often be a battle to survive and as a result business owners don’t always collect the information that they will need when they’re ready to take things to the next level.
When I started my own business, I spent money trying out various marketing methods and back then anything that got me clients was great but today I want to make sure that I’m getting enough of the right types of clients and spending the least amount of money I need to achieve that.
Over the years I’ve kept a log of how all of my clients came to me and I make it a habit to ask new leads how they hear about me, there are also other ways to do this like using a check out page on you website or through client questionnaires.
I also have an accounting system that tells me how much money I spent on that particular marketing activity, whether it’s networking, my website, telemarketing or any number of different methods I have used.
This gives me the ability to take the spend on each marketing activity, divide it by the client fees I receive and I then have a clear cost per client and ranking of which activity works the best.
For people selling services they are often restricted by the amount of time they have and it’s really important for them to get an idea of how long it takes to do any particular activity in their business and also which clients pay the most per hour of work.
Having an understanding of how much time it takes to deal with a client can be a huge benefit when working out how much to charge them and also identifying opportunities in the way you work to save time.
There are quite a few apps and programs out there to help you do this that involve pressing a start button before an activity and then stopping it after, the software then gives you statistics on the average time it takes to do that activity.
Key Products and Services
It’s no secret in business that some products and services sell better than others and make more money, being able to understand this can help you tailor your sales technique to steer customers in the right direction.
Unfortunately identifying the best products isn’t always a black and white process and there are often loss leaders in a business that attract customers who then buy higher value items, it’s important to understand the link between various products.
If you’re a retailer then you can measure things like the profit a product makes per meter of shelf/website space or the average spend per customer, it’s also important to keep an eye on things like wastage and returns.
If your main sales platform is a website then you can use tools like Google Analytics to trace your customer’s journey to you, while this only works with online marketing you can find out really useful things like whether they come from social media, other websites or even by entering your web address manually, which generally means they found you from your business card or leaflet.
The Keyword Tool
It’s not always obvious what potential customers are searching for in your industry and the Google AdWords Keyword Tool gives you the option of putting in a phrase or keyword and it will tell you how many people a month are searching for it, this is incredibly useful if you want to know how to optimise the content on your website so that the right people find it.
Having the right statistics and information available can drastically improve your chances of success, if you’re having a quiet first year in business then it’s well worth taking the time to set your business up to collect this information.
Thanks for taking part in our online course, Northants Accounting is based in Northampton and we act as the accountants for a range of small businesses both locally and spread out over the country, if you would like to find out a bit more about how we could help your business then please get in touch.