Make It Easy To Plan Your Time And Money

Make It Easy To Plan Your Time And Money

A common issue in many businesses and startups alike is that the clients that take up the most of your time and energy are not always your largest clients. In many cases, it’s quite the opposite, some of your smallest clients can take up a large percentage of your time. Whether you’re a soloprenuer or have been in business for 30 years, evaluating your revenue streams can be a big help to your strategic planning without taking you too much time.

And to save you time, this article will walk you through a straightforward template that you can download here. This tool makes it easy to visualize where you are spending your time compared to where you are getting the most revenue. The template is built for 12 month planning so you will want to print off two copies. One to evaluate the past years performance and one to plan out the next twelve months. Looking at past history is critical to understand if the investment you are making in certain clients is paying off in growth.

So let’s get started!

Step 1: Decide on a time frame. 

Again, it’s recommended to take a look at 12 months of history and project the next 12 months. To make is easy to read on your smartphone, we are going to focus on four months: February and March.

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Step 2: Categorize your clients. 

You may only have a few customers in which case, you can list each of one them separately. Otherwise, group them into clusters that make sense for your business. For this exercise, Sample Company, will have 3 clients which are written down the first column, to the left of Hours/wk and Monthly Revenue.

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Step 3: Fill in the the numbers.

Write in the hours per week you estimate that your company put into each client. Then underneath, fill in the actual revenue the business generated from each client. Your form should look something like this.

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Step 4: Generate Total Numbers and Percentages.

Now it’s time to track how you are doing by totaling up the hours per week and monthly revenue for each client. Put these numbers in the rows under, you guessed it, the total column. Then take the total number of hours per client and divide it by the total number of hours and place it in the column titled% OF TOTAL. Repeat this process for monthly revenue. At this point, your template should look something like this.

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Step 5: Evaluate your Business.

Start focusing on the % of total columns and compare how each client stacks up in terms of % of time you invest each week versus the income they generate. In this example, the largest customer has proportionately less time invested in it compared to the smallest company which takes up a larger portion of time compared to its percentage of actual revenue. Another interesting thing to note is that Client #1 is growing whereas Client #3 is declining in sales. 

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Step 6: Forecast and Plan for the Future.

Now it’s time to project future sales. Repeat steps 1-3 and leverage the evaluation you conducted in step five. Based on this analysis, it is recommended to put more time into growing the largest customers and shift time away from the smallest one. Note that you may decide to continue to provide the same level of customer service if a customer provides another value to you such as: providing referral business or if they are in a new space you want to grow in. With some customers, you may want to exit from servicing them entirely and if done accurately, this tool can help guide you through that process while growing other parts of your business.

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Once the forecasting step is complete, continue to update this on a monthly basis to see how accurate your projections are. This simple tool can help set up many parts of your business and you may find yourself ready to build a business strategy that supports your financial and labor projections.

Did You Know That Goal Planning Starts With Your 90-Year-Old-Self?

Did You Know That Goal Planning Starts With Your 90-Year-Old-Self?