What! You don't know how much you're making?

Have you calculated everything that it costs you to run your business? Not the cost of products or postage or packaging but the actual cost of being in business. Do you know what your monthly spend is to keep you business doors open? How about how many products you need to sell each week just to break even? If you don’t know this how do you keep your head above water?
It might be easy to look at the sales figurs each day/week/month and think ‘woohoo - look at all those sales!’ but did they make you any money?
We’ve being going over our accounts this month to find out exactly where Rainbow Designs is at and I tell you it was quite an eye opener! (Good and Bad) We are certainly growing and increasing our monthly orders but so are all our expenses, everything is going up from petrol and delivery costs to ink cartridges and cardboard boxes but we haven’t had a price increase since we open our doors in 2004!
This made me think ‘how can we possibly be making a profit’? So the only way to do this is to sit down and go through all the comings and goings of the business. How much does it actually cost for each gift, not just the physical items in the gift but the generally everyday costs that need to be met to keep the business running. There is so much I have to admit that I missed plus I don’t factor in my time running the business and simply ‘doing’ the orders.
Running your own business is rewarding but it is very hard contrary to what some people like to tell me! You NEED to know what products are worth selling and what aren’t, what profit each one makes but also look at the time it takes you to do each gift - are they still worth doing?
Advertising, marketing & promotion plus all the other bits and pieces that are part of your costs must be calculated into each product you sell to get a true reflection of how profitable they actually are.
Some of the things you need to take into account when working out the running cost of your business:
* electricity
* ink cartridges/copy paper
* telephone/mobile phone
* bank fees/merchant fees/eftpos fees/paypal fees/credit card and cheque fees
* internet/computer/laptop
* website hosting/domain name(s)
* newsletter program
* business insurance
So do you know what your business is actually making (or losing!).
Something else to think about: You can earn 8% on your money just by it being in a savings account, sitting there doing nothing. So work out your margins, how much higher than 8% is it and how hard have you had to work to get those margins? Makes you think doesn’t it!

Fly Hunter

A woman walked into the kitchen to find her husband stalking around with a fly swatter. ‘What are you doing?’ She asked.
‘Hunting Flies’ He responded.
‘Oh! Killing any?’ She asked.
‘Yep, 3 males, 2 Females,’ he replied.
Intrigued, she asked. ‘How can you tell them apart?’
He responded,
3 were on a beer can,
2 were on the phone.’

The End is Nigh!

The end of the financial year that is! aarrgghh, not again! Are you prepared? I’m not, not even close. My books are a mess, my files are lovely and neat with all my invoices and statements filed but that’s about as far as it goes! I bought MYOB months ago to update all my accounts but……
Running a business is hard and it’s made even harder if you don’t know what financial state you’re in. Trying to do everything in your business is hard and gets harder as the business grows so I recommend outsourcing things you don’t like doing or aren’t great at doing. Your accounts are important so should be a high priority, if you’re not confident doing your own books get someone else to do them. I know I’ve left it way too long and seriously need to find someone to take them over. I made a start last week and got in contact with a company who I’ve heard great things about plus they maybe able to help with a few other aspects of my business, woohoo!
I do my data entry daily (well most of the time!) and then file the orders away but I have started to slacken off with the amount of information I enter plus I started to change my system and only got part way through so that’s put me behind. With the end of the financial year getting ever closer I know I need to pull my finger out and get stuck in and knowing what work there is involved it’s never far from my thoughts! It’s like a big black cloud hanging over me, yuk! So don’t get yourselves in the same situation as me, organise yourself and your books from the very beginning - even if you start doing them yourself make sure you keep on top of things. The moment you realise you just don’t have the time or things are getting a little bit tricky seek outside help, it will be one of the best decisions you make for you and your business. I just wish I had done it earlier!!

May Stats

Interesting Rainbow Designs stats for the month just gone:
57% of visitors were from Australia, followed by USA with 21%
74% of users use Internet Explorer, followed by 12% for Firefox (which is what I use)
Tuesday was the busiest day followed by Wednesday
2pm-4pm was the busiest time of the day for visitors with 4am being the quietest (not surprising!)
Quite similar to our January stats - the busiest days do seem to vary month to month but are generally Tuesday, Wednesday and Thursday. These are things that as an online business owner we need to look at reguarly to help us find the best times to increase our online advertising and to also try and organise our week around these busy days. So, in knowing Mondays and Fridays are normally quieter we can plan our week and use these days (or part of them) for working on our business.
Do you utilise your websites stats or just look at them with a smile (or a frown if they’re not so good!)?