Uncertainty is a part of making business plans. But this should not stop you from creating strategic plans. This is where financial modeling comes in. Financial models do not make the future more predictable but it does help you choose between various options and prepare your business to navigate twists and turns as you implement your strategic plan.
What Is Financial Modeling?
Financial modeling is the act of building a conceptual framework that depicts where a business’ financial situation will be at some period in the future. It is based on real world information gathered from financial statements and market research.
When done correctly, a financial model considers all areas of a business’ financial performance and generates a three statement models, namely, income, balance, and cash flow . It uses clear, logical, and defensible assumptions in order to account for changes in business activity.
Who Should You Use To Prepare A Financial Model?
A financial model is a tool for your business that will be used to aid strategic planning. The person creating your financial model needs to have a strong understanding of accounting fundamentals and financial statement analysis, and ideally has knowledge of your industry.
What Happens After Creating A Financial Model?
While financial modeling can help a buyer feel more comfortable with your growth projections, it is only the first step in this process. You will want to use your financial model to determine the current and projected value of your company to see if it meets your goals. Next, you should detect areas for improvement or investment in your business, and develop a strategic plan for making this all happen.
Make sure to keep records of everything that goes into this process because buyers want to know how close you came to achieving past projections, what actions you took when you deviated or exceeded projections, which members of the leadership team were essential to this process, and how they can take your business to the next level.
Financial model can be used to develop and enhance strategic planning initiatives. It addresses five components: determining if your business’ value is where you want it to be, revising projected vs. actual results, finding opportunities for improved performance, developing action plans to achieve results, and setting the current organizational structure to reflect your business goals.
Why Should You Regularly Update Financial Models?
It is a foregone conclusion that your financial model will differ from what actually happens as time passes and conditions change. And that is why it’s critical to update your financial models and overall strategic plan on a regular basis. Any deviations from the model must be taken into consideration and actions must be taken to correct the issue.
Following a set playbook might make it even harder to get sales, find new clients or hit targets. With the changing environment businesses need to be dynamic to keep up with the demands of the target audience.
Given below are some tips on how you can effectively sell your product or service repeatedly.
Social Media Is Important
Using social media platforms only for your personal life is naive especially in an era where people turn to the internet to find information regarding a person or a business. Your social accounts must contain information regarding your personal life and your business. Strike a balance between the both these aspects.
Remember to stay away from politics as you are dealing with a large and varied audience. Stay away from any form of negativity and post helpful articles and videos. Always stay consistent and this will bring in more people.
Case Studies And Feedback
Providing proof or evidence has become highly important in today’s world. People often claim to be experts and pretend to be the best. Clients often need evidence and customers today perform a fact checking before they even approach a company.
This is where collecting feedback becomes important. Ask your customers to provide you with an honest review of their experience with your company. Collect their photos and post their feedback and reviews on your website, blog and social media. Such a case study will help you stand out in your field.
People believe that higher prices mean better clients and higher profits. The problem is unless you are providing a high end service and you are a high end brand you cannot charge a really high price.
You need to charge the right price considering your product, your brand, your presentation and the overall value of your work provides. When you are just starting out it is ridiculous to set a really high price. But overtime you can build up your brand and through research you can raise your prices.
Charging the right price at the right time is key in sales. You should align your price with your level of business.
Always be at your best and build a solid positive reputation regarding your company. Positive reviews and a brand name will bring in more clients.
Consider the way you are projecting yourself to the outside world. Study what you post on social media. Be aware of social problems and get involved in causes that are dear to you. Be a socially responsible organization that is known for its employee welfare, customer service and overall reputation.
Consistency is the key to success. Keep your social media up-to-date and also constancy meet clients and set up meetings. Follow ups is also important. Even though it’s a slow progress, keep moving down the sales pipeline.
With persistent efforts you will see the desired results. Keep doing your best and improve your business process and operations along the way to become the best in your market.
It is often believed that more choices are better. Businesses believe in offering a variety of products ranging in colour and models in the hope that it will attract customers. It is easy to believe that more options and freedom of choice make customers happy but this is far from the truth.
Choices Are Overwhelming
When you give people a multitude of options they become overwhelmed. If at all they do make a choice, they often contemplate about what they had to “sacrifice” or not choose when they made their decision. They wonder if a different decision would have made them happier. This leads to unhappiness and never being fully happy with their final choice.
This applies to buyers as well. When you offer more choices to a buyer, chances are higher that he will not buy anything. Too many options lead to anxiety and inevitably, inaction.
Making a decision is a mentally stressful and emotionally taxing process. Considering the varying factors, while making a choice, makes the entire process even more difficult. That’s why buyers find it easier to say a no than saying yes to any one of the options.
Choosing Should Be Easy
Make the entire buying process simple by cutting down your offers. Give your buyers single choice. It should be whether they should buy something or not. In every scenario you must ensure that the decision to purchase is made simple, easy and quick.
Eradicate and remove all unnecessary factors that might prolong or distress the customer. It most cases, it the vast number of options that scare away potential customers.
Simple Yes Or No
Simplicity of choices must be seen even in your marketing and sales messages. Let people make a simple choice within a limited time period.
This does not mean that you offer a single product every time. Consider your target audience and their budget and income. The idea is to provide three different levels of service to accommodate people with varying budgets and needs. This is also called “Olympic Factor Pricing.”
This is especially important when you are selling high end or costly items. It need not be taken into consideration with cheaper products because more products only complicate the process and the complication is not worth the end result.
Simplification Is Key
Reducing your options can also be applied in your marketing strategies. When you want people to share your content online, provide them with lesser options. Choose one or two of the best platforms that appeal to your audience and do not clutter your site with other icons and options.
The same can be applied for e-mail marketing. Do not overwhelm customers with innumerable offers and choices through a simple e-mail. Instead, stick to one major offer which the customer will be automatically drawn to.
Keep your homepage and websites relatively simple and user friendly. Do not bombard potential clients with your latest products and news. A simple website will be easier to navigate and let buyers make their decision.
All in all, if a business wants to improve its sales it must take away the customers’ freedom of choice by removing options. This will make customers happier and earn you profit in the long run.
Brand identity is the collection of all elements that a company creates to portray the right image to its consumers.
Brand identity includes the visible elements of a brand, such as colour, design, and logo, etc.
Complete Your Brand Strategy
Your brand identity will help you in executing your brand strategy. Your strategy is a detailed plan that outlines exactly what you are trying to achieve and how you are going to achieve it. Your brand identity, along with your content strategy, helps you communicate in ways that will let you achieve those goals.
As such, before you dive into your brand identity, it’s important to have a fully fleshed-out strategy.
Understand What A Brand Identity And Its Importance
Brand identity is more than a logo and colour palette. When designing your identity, you need to create a comprehensive visual language that is versatile enough to be applied over packages and used in websites. Depending on your brand, your needs may be more expansive, but a basic brand identity includes:
- Interactive elements
- Video and motion
- Web design
Build Your Identity
Get information from competitive analysis, customer feedback, brand audit survey, and brief to help form ideas. You need to take the text-based information and translate it into visual concepts. Luckily, the information you have is often steeped in emotional language about your brand’s personality, goals, and values. Now the challenge is to figure out how to communicate and enhance those sentiments through visuals.
The goal is to bring those words to life. The associations may be abstract, but it is important to get everything out.
A brand identity is an intricate design system. Each element influences the other, but it starts with your logo. As you go through iterations, flesh out logo mark, core shapes, and complementary imagery—all in black and white. As you receive feedback and iterate, you want to make sure that the core imagery is powerful enough to deliver the message on its own, without the enhancement of colour.
Certainly, emotion plays a huge role in colour choice. This is also, as previously mentioned, a good chance to differentiate.
A good colour palette is clean and flexible.
Your brand identity is a cohesive language. Typography should be informed by the shapes of your logo. You will think it is a simple choice, but typography is just as emotional as anything else. It needs to communicate the brand persona effectively.
Consider the type of imagery you will use, as well as the visual treatments. Include guidance on filters, treatments, sizing, etc.
When it comes to illustration, you need a cohesive and uniform language. Do not over-illustrate or use clashing styles. Instead, think of how your illustration will be used in conjunction with other visual elements.
Again, your brand may have unique communication needs, depending on your industry, content, etc. Make sure that your design:
- Interactive elements
- Motion graphics
- Web design
Build Your Brand Style Guide
Ensure that your designed brand identity is used correctly. A brand style guide should be created promptly.
Include clear, easy-to-follow guidelines for every part of the brand identity, including examples.
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Increasing sales revenue is a key process of developing a company successfully, but doing so is not so easy. To make matters more complicated, increasing sales does not always lead to an increment in revenue. This makes even the best advertising techniques fall short of serving towards the business objectives for profit and growth.
But if effective marketing is not enough, what is a business supposed to do to increase their sales revenue and promote healthy growth?
Here are some tips to increase your sales revenue,
1. Map Out Your Current Processes
Most businesses have an informal sales process, where everyone sort of knows what is supposed to happen and who does what.
The first thing you will want to do is plan out these informal processes to get a formal understanding of all the steps to making a sale.
2. Define Your Key Performance Indicators
Writing down your processes will allow you to track prospects as they advance from one step to the next. This will allow you to estimate how many leads successfully move through your pipeline. You will also know how long it takes to finish a sale on average from start to finish.
3. Follow-Up And Measure Performance
Conducting sales meetings are a good way to ensure a regular analysis of sales data. The purpose of the meeting should be to decide what possibilities are in the pipeline and how leads are moving through the process.
Your key performance indicators can also be used to estimate individual performance. Employees usually appreciate the transparency of understanding how they are judged. It can also be a great way to encourage friendly competition within your team.
4. Use Technology To Simplify Monitoring
Your next step should be to centralize all your client and contact information. This database can be in a simple form of a spreadsheet, but as your business grows, you will probably want to spend on customer relationship management software.
5. Start Forecasting Your Sales
You can think of your processes as a funnel or pipeline. By measuring your progress rate at every step, you will be able to determine the inputs you need to accomplish your sales goals.
6. Develop Your Competitive Advantage
The customers need a reason for buying your products or services, in terms of the benefits, results or outcomes which they would not get from purchasing from your competitor.
7. Increase Your Sales
After you have planned your processes and set a prediction, it becomes simple enough to increase your sales.
Two ways to do this are to,
- Increasing Your Average Order Size (sell more products)
Consider granting discounts for larger orders, free shipping for orders over a certain threshold, or upselling and cross-selling items.
- Improving Your Conversion Rate (sell more frequently)
you can also tweak your sales script, create offers that are more appealing and provide additional training to your sales staff.
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Entrepreneurs are mostly afraid to spend money or invest in their business during economic downtime or recession. It should be understood that even recession can be an ideal time to invest in your business and expand it.
Such a time can offer ample opportunities for innovative and creative businessmen. Most people choose to be inactive in such dire times and hope that things get better. But a successful businessman will prepare his business for growth when the economy turns around.
Given below are some ways by which you can remain active during a recession
Study Your Finances
Carefully study your financial statements and balance sheet. Try to see if your business is on survival mode and if you have any additional capital that can be used for expansion or other operational activities. Study your credit statements and agreements and see if there is room for negotiation and repayment flexibility. Check your credit terms with your suppliers and see that everything is effective.
Improve Operational Efficiency
This is one of the best times to improve the overall operational efficiency of the company. Start by eliminating unnecessary processes and expenses. Be sure that your processes are effective and deliver the expected results. Avoid overproduction and using under-trained employees. Ensure that your product quality is not compromised. Almost all businesses will be affected by a recession. This offers great opportunities for you to acquire products and supplies at a lower price from sellers. You can also invest in equipment and technology that will help is optimizing your production.
Invest in external business consultancies and experts who will help you in spotting and identifying areas in which you can be more efficient. Such professionals can also help in identifying the strengths and weaknesses of your company and how you can enhance and overcome them respectively.
Expand To New Markets
During an economic downturn, competition diminishes. It becomes an ideal time for exploring new markets. Assess your market and explore your options. You can consider a potential partnership with other companies to enter into new markets.
Another way to expand your market is to launch a new product or improving existing products. Keep up with your customers’ needs and provide them with the needed products and services. Make sure that you do better than your competition.
Include your employees during discussions and encourage your team to generate new ideas that will help boost your company. Employees might provide a different outlook or insight into the market changes and needs.
Always keep a positive outlook even during tough times. It is difficult to invest during unsure times but with proper research, your investment will prove to be fruitful down the line.