One of my major goals for 2010 is to focus more on the numbers behind my business. As in diligently keeping up with my record keeping, analyzing my sales, and figuring out how to maximize profits. I’ll take a cold hard look at ROI (return on investment) and think about ways to up my ADS (average dollar per sale) and the conversion rate on my website. (The percentage of visitors who actually buy something.) I’ll be generating regular sales reports, and maybe even a profit and loss statement or two.
Now, before you think I’m turning into some greedy, money-loving, wannabe executive, let me tell you why you should do the same:
If you’re anything like me, you started a craft-based business because you care about more than the bottom line. Maybe you want to live out your dream, or spend your days somewhere other than a cubicle. Maybe you believe in the power of small, local businesses to improve the community and change the world. Maybe you want to provide a decent living for your family, or an employee or two, or support worthwhile causes.
Well, let me let you in on a little secret. You cannot do any of these things if you are not profitable.
Trust me, I’m not advocating that you give up everything you value for a cut-throat pursuit of higher profits. (Far from it!) What I’m suggesting is, if you aren’t taking a cold hard look at your bottom line, now is the time to start! The new year is the perfect time to think about straightening out your finances (it is the start of the fiscal year) so that your business can achieve all those wonderful goals you’ve set for it.
So pick a bookkeeping system that works for you, maybe give your accountant a call, inventory the work you’ve got on hand, and start keeping track of those sales. (And no, just looking at them on Etsy doesn’t count.) You can be sure I’ll be doing the same – not to mention sharing my own number crunching experiences with you here.
So, how ’bout it? Do you have any number-related goals for 2010?
Rachael, Pistachio Press
This is on my list of goals for the new year, too! I’m not horribly bad at keeping track of everything, but I certainly have room for improvement. Love the new blog, I’ll be visiting frequently. Happy 2010!
tara - scoutie girl
ooooh! i do so love some number-based goal setting. in fact, i would go so far as to say that all goals should boil down to numbers. how else do you really track your progress?
so – my number one feel good goal for the year is to “tell the stories behind the stuff”. i think that will set scoutie girl apart from the rest of the handmade blogosphere. i’m implementing that goal by innovating a different way of thinking about my content.
but how do i plan to measure this goal? by my bottom-line growth goal: 5000 subscribers by year end. judging from other profitable, full-time bloggers numbers – that seems to be the number i need to shoot for to truly be successful. but the best way to reach that big number is great content and unique perspective: just like any crafter, artist, or designer!
Holly Wilcox
loving this blog! v interesting and helpful, can’t wait to read more!
holly (:
meauman
So happy everyone is enjoying the new site!
Tara – thanks for tying the idea back to other business as well. I think focusing on the stories behind the objects is a great way to boost your bottom line! And it looks like it could becoming a trend in 2010 – so you’re definitely positioning yourself ahead of the curve.
neal s
I’m digging the site — nice work!
The only thing I’d add to this is: keep the numbers in perspective. We have so much data available to us now that it’s become easy to over-think. You want to have your numbers in order, of course, but you shouldn’t tilt too far in that direction and let them start fully dictating your approach. Sometimes a thing is worth doing even if the numbers don’t bear it out right away. Indeed, sometimes it’s worth doing even if the numbers don’t bear it out at all.
You have to make sure that your vision, your voice, and your creativity have a place at the table when it comes time to take a look at the cold facts. These are the things that define you and your work. Sacrificing them for the sake of conversion rates and unique visitors and subscribers can wreak havoc on your identity. Keep the long-term and the big picture in mind.
Not saying you’d argue against that, I just thought it might be worth throwing out there for the sake of discussion. Looking forward to future posts.
Caitlin
Megan, this is awesome! I’m so glad to see crafters who aren’t afraid to talk about the business bottom line. I’m not the best at keeping track of my numbers, so that’s a big goal of mine for the coming year.
AmyD
This is at the top of my goals this year. I’ve tried every accounting system there is and I think I have finally settled on one that works for me.
At my old, real job, we had to do end of the month reports and that’s my goal for 2010.
Great site!
meauman
neal – couldn’t agree more. i think all the numbers in the world are useless if you don’t have vision and passion.
for me, focusing on the numbers is important to give me the freedom to pursue new designs and ideas. (its hard to make stuff when you can’t buy materials.) oh, and to make 2010 the year i pay off my business credit card!
amy – do you mind me asking what accounting system you’ve settled on? i think that’s always a hard decision.
thanks caitlin!
Caitlin of Rebound Designs
I’d love to hear any and all suggestions for accounting systems, I do everything with pencil and paper, and bags of receipts in a drawer….
Valerie Heck
This site/blog looks great so far! I’m so glad you started it.
Handmade Jewelry by Peggy Li Creations
Ditto, ditto and amen.
I’ve had 3-4 versions of Quickbooks lying around, I’m determined to get it up and running, if only to track my expenses but ideally to also fold in my sales to be able to generate revenue reports and see if the things I *think* help boost my business actually *do* help my business. This is not only important for keeping your business successful and thus, giving it a chance to grow, but also to help have foresight into the future. By seeing my patterns in spending/revenue, I will know when I have big expenses coming up (say, Nov for Dec holiday supplies) or big droughts (those slow summer months). Identifying these patterns can then help determine when I need to spend $ on things like advertising or when the best time to put in those material orders might be.
For example, every year I forget about Mother’s Day (since it comes after April tax madness), but looking back on my numbers, it was almost as big as Xmas. This year, I don’t want to miss that opportunity and not support it with emails/ads/marketing/outreach.
Great blog, it asks all the right questions!
best,
peggy