Understanding Sales Numbers
Running a business requires understanding a lot of numbers — the operational costs, financial numbers, and sales numbers that comprise your typical income statement, P&L, and balance sheet.
Your financial understanding of your business also means understanding the cost of goods or services sold, the profit margin, and much more.
Today, I’m focusing on Sales Numbers.
How many sales do you need to make each day to keep the business running?
How many hours must be put in by how many employees to achieve those sales?
Are they strictly sales hours, or do they include administration and marketing hours?
I learned how to understand the sales numbers the hard way! In the first three days of the second business I started, I sold absolutely nothing, despite being out “working” from 8 am to 6 pm.
It took me a while to recognize that while I was “at work” all those hours, I didn’t really do “the work” needed to cultivate sales. Then it took me years to learn how to do it.
Eventually I understood was that I would generally speak to around 10 people before I would have one successful sale. For every one hundred people I engaged with, one to ten people would buy.
If you increase the interaction, if you get them to touch the product, feel it, experience it — physically or vicariously — one out of seven people might buy. You’ve improved your chances by 30%.
Once I learned that, my attitude shifted from being disappointed when hearing NO, to celebrating that NO.
What I learned is that you can spend time educating someone about how they could benefit from the product or service, or move on to the next person that might be excited because it fulfills a need or opportunity for them.
Once I truly understood this concept, I moved from zero sales a day to several transactions a day, then 15 to 20 and sometimes up to 50 transactions every day, and when I was involved in retail, thousands of transactions each day.
The more I reflected on the process and progression of my sales numbers, the more it became clear that keeping track of those numbers is vital. if you are not keeping track, it might look like you’re busy or feel like you’re busy, but the truth is you are not busy with what it takes to get the sales you need to keep your business going.
BEFORE YOU GO
We see our blogs as opportunities for dialogue. Please share your thoughts as comments.
- What do you do to keep track of your sales?
- Do you track the number of proposals, and the number of calls you make to new prospects?
- What tips do you have for others about tracking sales?
All these are parts of the metrics that you want to explore as you keep track on your sales numbers. The sales cycle of each industry is different from the next, but what I have shared here are standards.
Faris Alami is Founder and CEO of International Strategic Management, Inc. (ISM). He works internationally, presenting Exploring Entrepreneurship Workshops and other entrepreneurial ecosystem — related ventures.
#entrepreneurship #salesnumbers #farisalami