Do you own a product based business? Whether you own a retail store or sell online, if you have a product based business there are two things you need to nail down in order to grow your business:
1. YOU NEED TO KNOW YOUR NUMBERS.
It seems simple but most people don't know their numbers. They don't create a business plan, they don't balance their books every month, they don't know how much it costs to create and sell their products and they don't know if they are making a profit or suffering a loss.
You don't know what you don't know.
I understand the reality of this. When we first started our bakery we didn't know our numbers either. I am really ashamed to admit that. You would think as an attorney who grew two law firms I would have been all over those numbers. Nope, not at all. You see, I was never supposed to be the numbers person. I wanted to just be the creative person. After so many years of thinking analytically and watching numbers closely, I wanted to let the other side of my brain run wild and be creative. At the beginning of our bakery business my sister and I (my partner) decided to take on a third partner who promised to take care of all the business stuff, including the books, the numbers and the website. Then I found out that person was totally failing and didn't do what she said she would do. I discovered well into the business that we actually had NO numbers and NO books. Receipts for almost a year had piled up if they existed, books were not balanced, and the website was a disaster (not that the website has anything to do with numbers BUT we were taking orders online and that system was a mess).
It took me a good deal of time to clean up that mess. I also had to learn some new skills. During that time I realized we were making product we didn't know how much it cost us to make. I mean we always had an idea (read: guess). Guesses don't make a profit guys. So we got to work and we figured it all out. I got us on a system for the books while my sister got to work figuring out to the penny how much EVERYTHING cost. We knew how many cents worth of buttercream was on a cupcake AND we knew what it cost to get that cupcake out the door. We figured out what products were worth it to sell and which simply cost too much and needed to go. That really helped our bottom line.
When you are a creative you are super passionate about what you are creating. You're also so busy creating that things like profit and numbers don't always make it on your To-Do list. BUT without those things you simply have a hobby, not a sustainable business. So here's my second big piece of advice for ANY business:
2. STOP CREATING
What? That's right: stop creating and spend time selling.
I know that's really hard to do, especially if you own a creative business or a food business. But in order to have a sustainable business you need to SELL what you've already created. If you aren't selling enough it's not because you haven't created enough, it's because you need to spend more time selling. You will grow your business through sales and knowing your numbers. As you grow you can create more.
This was also really hard for me to implement because I AM SO PASSIONATE ABOUT CREATING! I love it! I loved creating new flavors for the bakery, I loved to decorate, I loved to create programs and stories and graphics for the website. How was I going to stop creating and focus on sales? I mean once I dusted off the cobwebs of my creative brain there was no going back---creating is a part of who I am and what I love. BUT.
Without sales I don't have a business.
So I had to work on sales. I had to become a better salesperson. I had to figure out what was selling and sell more of it. I had to increase sales in order to increase profit and grow my business. That's the way to scale.
There are a lot of nuances that go into growing a business but it really does come down to selling more. There are million dollar businesses that don't even have websites but they have a significant amount of sales and profit---so who's to say they are doing something wrong? In the end we really want this business that we created to stay in business, right? You have to put your desire to just do the fun stuff to the side for awhile and get down to doing the work that will keep you in business and will help you grow. With business growth you get peace of mind and a better work-life balance. As your business scales you can hire people to do the things you would rather not do---such as sales, if that's one of them. That will leave you time to get back to creating all the things you want to create.
As we enter the fourth quarter, turn your focus on sales and see what happens!