Four key focus areas that will increase your income

Directions are always relative to your current location. If your goals and objectives are a map, then your business numbers are the location beacons telling you where on that map you are. Unfortunately the busyness of business makes it easy to lose sight of where you’re going or where you are.

If you want to be successful in business you need to know which numbers are important, where to find them, and what to do with them. Here are four key performance indicators to keep an eye on.

1. Sales performance

Measuring your progress towards sales revenue targets is simple. First you need to set your annual sales goals, and then work backwards to monthly, weekly and daily income goals. Get in the habit of checking your sales dashboard daily allowing for weekly dips and peaks for days of the week.

When setting your goals and looking at sales performance, don’t always mix the revenue that comes from services performed and products sold. If you split these up instead of lumping them together, you’ll be able to focus your efforts on increasing both of these income streams to improve your overall sales performance.

Don’t be discouraged if you can’t hit your goals the first few times. Setting and hitting goals takes practice. And if you exceed your targets, good work! It’s time to aim higher.

2. Client insights

You can’t create more hours in your day, but you can get more value out of each hour. The average value of a client appointment becomes hugely important if you want to increase your revenue. Rather than getting more clients in and working longer hours, it makes sense to have each of your clients spend more every time they visit.

Each new client you bring into your business has a cost associated with them. If you can spend this cost once and have that client return time and again, you’re saving a lot of money.

As well as tracking how many new clients are flowing through your door, you should measure how many of them have a future appointment and how many actually return to your business. If this number is low or starts to drop, this is telling you something about your business practices need attention.

Once you start keeping an eye on these numbers, you’ll notice that increasing them will be as simple as changing your service menu or making adjustments to how you invite your clients to return.

3. Productivity

Making small adjustments to your calendar could give you an extra $23,000 in revenue.

Don’t be fooled into thinking you sell haircuts or waxing services in your hair or beauty salon, because you’re really selling time. Being smart with your time management and scheduling should be a key area of focus for you as a business owner, because failing to do so can cost you a lot. Keep a close eye on your schedule productivity and how much of your time is actually full of clients.

Those spare gaps in your appointment book could be costing thousands of dollars every year.

4. Staff performance

Your team want to succeed as much as you do. You can work towards this common goal by measuring their sales, individual client insights and productivity. Besides, they won’t be able to improve unless they know how they’re doing.

Given the right tools (like our new dashboard which measures staff performance) and direction, your people will be able to track their journey to success. Encourage them to use these tools and check their results on a regular basis, even as often as after each client to get that instant gratification for the hard work they’re doing.

Staff performance doesn’t have to be one of those topics that you avoid. We recently visited Loxy Salon in Wellington who have fun with their sales goals by creating friendly competition. They have a snakes and ladders game on the wall of their salon. Every time one of the team sells a product, unit, or rebook, they move along on the gameboard once space. The first one to the end wins!

Small business owners who know their numbers have a huge advantage over those who do not. They don’t need to ask for directions because they know where they’re going, and they know where they are. And when you start paying attention to the numbers, you’ll notice that they tell a story that turns the time and money you invest in your business into results that you can measure.