Have you reached a point in your business where no matter how hard you work, you can’t seem to get ahead? When you’re worried about how you can come up with the money to cover your bills, taxes, and even pay yourself, it’s difficult to think about anything else.
What if there was one thing you could change to reach a different outcome? If you need a profit boost to help your interior design business or landscape design business, you can make a real change with just a few simple steps.
The first step in scoring a profit boost is allocating your money properly. When you make your money work for you and your business, it’s easier to cover your expenses.
Ultimately, you want to have enough money in savings to cover your expenses for three months. Looking at your finances, can you say that’s the status of your business? If not, it may be time to make some changes.
Start by allocating your weekly income to separate accounts for each business interest you need to cover. You should break your expenses into Operational Expenses, Owner’s Pay, Profit and Taxes. A sample breakdown could look something like this:
You can always adjust your numbers to fit with fluctuations in income, so it’s good to monitor your numbers regularly.
Next, look at your services and products and identify the money makers and money eaters. Consider every aspect of each service and product, including project expenses, overhead, marketing, payroll, taxes and profit.
For each service and product, look at the cost of service and profits. Include how long it takes to perform the service or product and the hourly rate. Don’t forget any additional expenses, like other payroll costs.
If the total cost outweighs what you earn, you need to make some changes to your pricing or how efficiently you complete the service or product. You only help your business if products and services turn a profit. If they don’t, you’re starting at a financial disadvantage.
What happens when you price something at $5,000, but your competitor offers it at $10,000? Learn how to sell your product to clients by highlighting why your product or service is worthy of the higher price point.
Consider what you do differently and lean on those points to overcome the objections. For example, your landscape design business charges more than your competition, but you use higher quality materials for every job. Or, your interior design business provides some unique elements or processes that the competition does not include.
The most important aspect of this process is keeping track of everything. Business expense tracking is critical for every interior design business plan and landscape design business plan.
Track all marketing activity, appointments you book, proposals you submit, sales you win, and income you earn. Let’s talk about how to keep track of business expenses and profits to streamline your finances and improve your bottom line.
Leading indicators are real-time numbers that cover the things you do to generate interest and leads. You must track as much as possible to determine what’s working and decide where to invest more time and money.
To complete your interior design business plan or landscape design business plan, you also need to monitor lagging indicators representing your sales activity.
It’s important to keep up with sales activity that tracks how many proposals you submit and how many of those convert to sales.
Also, you should address the projected monthly income. Track new sales income, total monthly income, projected sales (not collected but sold), projected expenses (still due this month), and projected monthly total.
Create a scorecard that addresses all of the included areas of the leading and lagging indicators of your business.. Update and review the data weekly to identify where you need to adjust. Adjust your services and products based on the information you compile.
The ultimate goal is to improve efficiency and create services and products to be profitable. It may involve adjusting the pricing of your products and services or finding more efficient ways to operate.
Many businesses struggle with knowing how to keep track of its expenses. If you want to learn how to keep track of profits and manage your business expenses, sign up for our Free Group Workshopsp and let us help you grow your business.
You can also book a free 1-hour consultation and to discuss your business goals and objectives and how we might be able to help you achieve them.
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