Many businesses are multi-faceted. Diversifying is a good thing, so many business owners have a large network of different offerings. Because of this, it can sometimes be difficult to know what offerings to focus energy into. Today, I’d like to introduce a way to analyze your business and figure out where to focus.
It’s About Time
By studying your financial records with an eye to times of the year, you can learn a lot about how your business behaves over time. Whether your business is product- or service-based, it is likely subject to fluctuations. It’s likely that these fluctuations are seasonal, or else focused on specific events. For example, let’s say you own a craft business that brings in the most revenue in the spring and early winter. If you look closely at your records and what you’re doing in your business throughout the year, you might realize these spikes in revenue come from particular sources. In a craft business, it might be that there are several public craft fairs you like to attend in the spring. In early winter, perhaps people buy your products as Christmas gifts. (For some advice specifically about craft fairs, please check out this post!) By analyzing time cycles in your business, it becomes more apparent to you what times of the year and what offerings bring in more revenue. This makes it easier to direct your focus in your business.
Using This Info
Once you’re able to analyze your records from this perspective, you need to figure out how to use the information you find. Focusing on the products or services that bring you the most revenue, as well as the time of year, events, or other factors that effect this, is an important way to discern this info. How can you re-create these conditions to bring in more revenue? For example, perhaps you have one product that’s particularly popular around summertime – can you create variations of this product? How can you expand here?
In our current situation, many people have had to adapt their offerings. Perhaps you’ve had to do this in your business as well. If so, it could be great to conduct this type of review over your financial records of the last several months, since shelter in place began. Ask yourself the questions above, and think about what results you’d like to achieve. Would you like more revenue? More sales of a certain offering? Or perhaps you’re just not clear about what’s working best in your business. Analyzing time cycles can help you figure this out.
This is one of many things a good bookkeeper can help you discern from your records, and something that I regularly do with my clients. If you’d like some support in this process, please think about scheduling a curiosity call with me. I also recommend reading my free e-book, the Cash Flow Reboot Guide, for ideas and strategies to adapt your business to the ongoing pandemic conditions.
Image by Nicole Geri