“Oh, the places your lead magnets will go! There is traffic to be directed! There are leads to be gained. There are buyers to be won! And the magical things you can do with your lead magnets that will make you the winning-est winner of all.” — inspired by Dr. Seuss, Oh, The Places You’ll Go!
The number one urgent problem most business owners have is that they want more clients. That means you need to attract leads who will one day become clients.
TRAFFIC => LEADS => PROSPECTS => CUSTOMERS
Turning traffic into quality leads isn’t always the easiest thing to do in the world. But having a quality lead magnet that “magnetizes” the attention of your audience makes the job a lot easier.
A well-designed lead magnet delivers immediate value to the recipient and begins to build the “know, like, trust, respect” factor. It also begins to establish your position as an authority and trusted resource. More importantly, it leads your audience to the next appropriate action step, which may be either getting more information or making a buying decision.
Because lead magnets are such a critical element of your entire marketing and sales pathways, I invite you to attend the next Lead Magnet Master Class: The 10 Most Important Tweaks to Make to Your Lead Magnets So You Can Triple Your Email List Growth in the Next 12 Months
Space is limited, so click to register right away!
Then get ready for some “flat forehead” moments during this MasterClass. You’ll learn easy tweaks you can make right away so your lead magnets convert better and you grow your email list faster!
We’ve all done it. We’ve entered our names and email addresses into a website form to get a free gift. The gift may have been a variety of things, such as a free report, eBook, mp3 audio, video, webinar, teleseminar, and so forth. From there, we downloaded the free gift and typically started receiving emails from the gift giver.
From our perspective, we’ve received a “steal-of-a-deal:” something of immediate interest for free.
From the perspective of the business from which we received the gift, it’s worth giving something away to obtain our contact information and lead us into their marketing and sales funnel.
This “free gift” has many names, such as freebie download, ethical bribe, irresistible gift, etc.
My favorite term is “instant gratification gift,” but for our discussion, we’ll refer to the free gift as a “lead magnet.” This has a nice ring and visual imagery to go with it.
The Lead Magnet is an item of value that provides instant gratification to the recipient in exchange for their contact information.
For businesses, the main purpose of the Lead Magnet is to increase the likelihood that someone, either online or offline, will exchange their contact information for the value promised by your Lead Magnet.
To accomplish this task, your Lead Magnet must offer meaningful value in the minds and hearts of your subscribers.
If the Lead Magnet does its job, then a significant number of subscribers will be interested in learning more and ultimately buying from you.
All marketing and sales paths lead to and from your lead magnet.
This is why I call the Lead Magnet a “superhero.” It has a super-critical job to do that involves heavy lifting: getting the attention of potential buyers, enticing them to express their interest, and then setting the stage for future sales.
Your Lead Magnet can be as simple as a checklist created in a Word document. Or it can be as involved as a 12-part training program with text documents, audio, and video.
I encourage you to create a number of Lead Magnets. Testing different Lead Magnets and variations of Lead Magnets tells you which ones generate the most subscribers and lead to the most sales.
As you might imagine, there are many ways to create your lead magnets. For that reason, I’ve created a free resource guide that I’d like to gift you (Ah, you saw the lead magnet coming, didn’t you? :-))
Here you go: Resource Guide for Rapid List-Building: The Best Easy-to-Use Tools for Creating High-Converting Lead Magnets in Less Than a Day.
It’s wise to understand the tools and resources that are available, even if you ultimately hire a designer to create your Lead Magnets for you. That way, you will be better informed and more involved with the strategic and creative processes. In addition, you’ll be a better judge of hiring a good designer, one who ideally understands both design and marketing.
Click here to get instant access to your free Resource Guide for Rapid List-Building: The Best Easy-to-Use Tools for Creating High-Converting Lead Magnets in Less Than a Day.
Let your Lead Magnet superheroes help you rapidly grow one of your most valuable business assets: your email list.
Whether you’re a service business or you are a product-oriented business, you can only influence revenue by changing one or more of these three variables:
- Getting more & better buyers and referrals
- Enticing buyers to buy more at one time
- Enticing buyers to buy more often
These are the three variables of the “Revenue Ratchet Formula.”
This SlideShare presentation covers the strategy of increasing the number of people who buy from you: Getting more and better buyers and referrals.
In the first blog post in this series, Ratcheting Up Your Revenue (Part 1): Power Strategies Every Smart Entrepreneur Needs to Know, we covered an overview of the only strategies a business can use to boost its revenue. Click here to read that post
In the second blog post in this series, Ratcheting Up Your Revenue (Part 2): Enticing Buyers to Buy More Often, we covered a less costly but highly effective revenue ratchet strategy: Enticing buyers to keep coming back for more. Click here to read that post
In this blog post, we’ll discuss ways to sell more to your buyers by encouraging them to buy more and/or higher-end products and services each time they buy.
A word of caution though: Don’t rush out and arbitrarily raise your rates. Instead, consider the following “power practices” and apply them thoughtfully as you go about increasing the size of each purchase.
Selling More: Power Practice #1: Give your buyers obvious and easy reasons to buy more with each purchase.
Let’s look at how you might do this. First, you have to understand their needs; how do you fulfill their needs? In other words, you want to ask the question, what’s the best way to solve your customer’s problems and fulfill their wishes and desires?
How do you figure what your buyers want? You have to ask them.
Here’s an instructive snippet from a conversation with a coaching client that illustrates this point:
Me: “What’s your value proposition?”
Client: “We make life easier for them. We help them make more money.”
Me: “How do you know this?
Client: “I’ve been in business for 15 years.”
Me: “Okay that’s great, but how do you know that these are the specific results, improvements, outcomes and experiences that you’re providing for your clients?
Client: Silence for a little while.
Me: “Would you be willing to directly start asking buyers why they bought from you and what they want more of? Call them up. When they make a purchase, ask them. Do a survey, formally or informally to understand and meet your customer’s needs.”
Client: “I’m having a flat-forehead moment.”
You may already be successfully providing a valuable service; yet, you still would do well to speak with your customers and clients and get feedback. Ask this simple question: “What would you like to buy from us that we are not currently offering and if we offered something else, what would you want to buy from us?”
What you think you’re providing and what your buyers say you’re providing may be two different things. Similarly, the reasons why you think your buyers purchase from you may be surprisingly different than what your buyers actually state as the reasons. The only way to find out is simply to ask them!
Selling More: Power Practice #2: Continually add value.
Value exists in the minds, hearts, and experiences of your buyers. Similar to Power Practice #1, ask your buying audience: “What else can I add that’s valuable?” and “Is what I’m offering still valuable to people?” Times change, things change, economies change, mindsets and wishes and desires and problems change.
It’s important for you as a business to be adaptable and flexible enough to be able to continue to add value on top of what you’re already offering. The most efficient and reliable to do that is to continually ask questions of your buying audience and to listen to what your buyers are saying they want and need from you. You have to provide what they want before they’ll buy what they need.
Be aware that what buyers say they want to buy isn’t necessarily the same as what they really need. That’s okay. Sell them what they want. After that, you can sell them what you as an expert know they really need.
Selling More: Power Practice #3: Reinforce the ultimate value that buyers get from the business solving their problems and fulfilling their desires and needs.
Businesses commonly overlook such opportunities. A simply way to reinforce that value is by asking customers to tell you why they’re using your products and services, why they chose to buy from you, and what they’ve gotten out of them.
You may not always get desirable feedback but it will be very instructive and, used properly, will make a significant difference if you apply that feedback to your business.
You can reinforce the value by capturing raving fan stories, success stories, and testimonials, then sharing them with your potential buyers and existing buyers. This is called “social proof.” For instance, if you go to my website you can watch videos where you hear from the voice of some of my success stories what they got out of working with me. Success Interviews and 6-Figure Success Stories
In instead of or in addition to a “Success Stories” section on your website, you can sprinkle testimonials across different pages on your website as well.
Simple reminders with ideas and tips about how to get the most out of their purchase also serve to reinforce the value of their purchase and encourage potential buyers to jump on-board. TechSmith, the creators of Snagit and Camtasia, does a fantastic job of doing this through their “Your TechSmith New You Can Use” electronic newsletter.
Selling More: Power Practice #4: Focus on value conscious buyers, not price-sensitive consumers.
Price-sensitive customers buy based on who offers the lowest price for what they believe are comparable goods and services. They very often buy at the lowest price at the cost of quality, features, benefits, durability, longer-term value, and overall results.
For you, the problem with price-sensitive customers is that they tend to be disloyal when it comes to buying from you again.
They also tend to be the toughest to please and the most likely to be easily dissatisfied.
Value-conscious customers, on the other hand, buy based on trust, relationships, quality, service, outcomes, and the ultimate experience they get from doing business with you. Over the long-term, you establish an ongoing relationship with these customers in which you’re both invested. As a result, they are more likely to be fiercely loyal and supportive of the longer-term success of your business. Though their expectations remain appropriately high, they are more understanding, patient, and forgiving when things don’t go as well as intended.
In general, buyers who are value-conscious will buy more from you at any one time than price-sensitive ones.
Selling More: Power Practice #5: Shift your mindset to set your product prices and service fees based on value.
The more common approach is to set fees based on hourly rates, on what the competition is charging, or on what you mistakenly fear is what customers can afford to pay.
For a lot of entrepreneurs, this is a very challenging subject. It takes a committed effort to shift existing habits and mindsets. I’ve worked with a lot of people on this. For many people, they just aren’t as confident about stating their fees. When it comes to setting fees, frequently there is this little voice that goes off in the back of our minds that says “You can’t do that.” “People won’t buy from you.” “You’ll lose all your customers.” “Your business will come to a screeching halt.” “It won’t work. It’ll be a disaster.” “You’re going to fail.” This comes from mistaken beliefs about yourself.
What is the number one reason that people don’t set their fees based on value?
The number one reason that people have a challenge in setting their fees based on value is self esteem. They have a weak relationship to themselves in understanding and appreciating who they are and the value that they provide to others.
When you alter your beliefs, thoughts, and feelings about who you are as a human being, you gain greater confidence in the value that you have to offer and in setting your fees based on value. This inquiry opens up a whole host of other things such as emotional feelings, emotions that are based in the past, typically from our childhoods.
Expanding and upgrading your mindset about the value you provide and setting fees and prices is an ongoing process. Engaging in this work is likely to boost your confidence in the value you provide with potential clients and reinforce that value for existing clients.
In Part 4 of this series, we’ll cover 5 more power practices for encouraging buyers to spend more each time they buy from you.
In the first blog post in this series, Ratcheting Up Your Revenue (Part 1): Power Strategies Every Smart Entrepreneur Needs to Know, we covered an overview of the only strategies a business can use to boost its revenue. Click here to read that post
Of the three “revenue ratchet” strategies, the first one, “getting more and better clients and referrals,” is the most obvious and commonly attempted. Notably, this is the strategy that requires the most time, effort, and money to succeed.
For these reasons, we’re going to take a different approach and focus on a less costly but highly effective revenue ratchet strategy: Enticing buyers to keep coming back for more.
If you want buyers to keep coming back for more, you must make it easy and compelling for them to buy more often.
To do that, you have to make them feel good about coming back again and again. You must make it easy and worthwhile for them to do so. Common sense, right?
Recently, my business partner, Dan, experienced quite the opposite. Dan spends his summers in Pennsylvania and his winters in Georgia. His cable and internet provider in Georgia is Mediacom.
Dan left for the summer to go to Pennsylvania. Unfortunately, a family health crisis arose, which required him to return to Georgia about a month later. He called MediaCom to restart his cable and Internet service. That’s when he learned that their policy states that if you cancel service and then reinstate within three months, you must pay an extra charge of approximately $30-$40 a month.
For subscribers who need to suspend their service for extended periods, Mediacom does not offer an option that allows you to place your subscription on “vacation mode” for a small fee to maintain it, and then resume your subscription upon return. Ostensibly, the policy is designed to prevent people from switching back and forth between subscription plans to get the next introductory special deal.
Dan went to the MediaCom office to explain the situation – that he had returned for a family medical situation – and that it was clearly unexpected. He thought that once they understood that it was due to a family health crisis (not him trying to cheat the system for a lower rate), they would make an exception and wave the extra monthly fee.
Understandably, this really irritated Dan. Therefore, he did something that he had been threatening to do for a couple of years, but never had the impetus to do so because it was just easier to keep stopping and starting his service with MediaCom: he did some research and bought a Roku device for $50.
For $26 a month, he gets all the channels that he wants. Effectively, he cut his cable bill by $75 a month.
Now he owes MediaCom a big “thank you” because he would not have changed companies, except for the fact that MediaCom absolutely ticked him off by hammering him with that extra charge.
Clearly, this policy is a great way not to keep customers coming back for more. In the end, they lost a customer, worth over $100 per month.
In addition, Dan and partner, Martha, readily share this story about Mediacom to family, friends, and colleagues. In fact, one person they know of is doing exactly what Dan did: cancelling their MediaCom subscription and getting a Roku. So now, Mediacom has lost over $200 per month in revenue.
Mediacom’s shortsighted policy and lousy customer service make it difficult, inconvenient, and costly for customers to keep buying from them more often. Their practices directly feed customers to their competitors.
Answer These Three Questions to Entice Your Buyers to Buy More Often:
1. What can you do today to enhance the performance of your products and services?
2. What can you do today to make it easier and more appealing to your buyers to use your products and services?
3. What can you do today to show your clients, customers, and patients that you care and that you value their business?
Start by answering these questions for yourself. And if you really want to turbocharge your results, go out and ask your buyers these very questions.
Listen to what your buyers have to say and then show them you care by incorporating their feedback into your products and services. By doing so, you’ll be well on your way to cultivating customer loyalty and enticing them to keep coming back for more.
In Part 3 of this series, we’ll cover tips and ideas on how to entice buyers to buy more from you each time they buy. Stay tuned.
Scores of fellow Freedompreneurs have shared with me that they need help finding more ideal clients and turning potential clients into paying clients.
If this sounds like you, you are certainly not alone. Over the years, I’ve noticed that many entrepreneurs, even big businesses that ought to know better, spend the majority of their time and effort on getting more clients, customers, and patients.
By itself, this is not a problem; it’s actually desirable, except for the rare business where they have more business than they can handle.
However, I’d like you to consider why you want and need to get more buyers: It’s to generate more sales and pile more cash into your bank account, right?
That being the case, why not focus on what you ultimately want – more cash in the bank – rather than solely on getting more buyers?
Along those lines, today’s blog post kicks off a mini-series in which we’ll explore strategies that go beyond simply getting more and better buyers. I call these “revenue ratchet” strategies.
For the duration of the series, you’ll find it useful to refer to this Revenue Ratchet Formula Memory Jogger.
Let’s walk through how this works:
If you tell me the number of clients and customers that you have in a given year, how much each customer buys each time they buy (the average size of each sale), and how often customers buy from you in a given year, I can predict your total revenue for the year, almost to the penny.
This is what I call the “Revenue Ratchet Formula”:
Said differently, your revenue equals the number of buyers you have, multiplied by the average size of each purchase, multiplied by the number of times each buyer makes a purchase, for a given period. It’s very straightforward.
In order to increase your revenue, you have to boost one or more of these three variables. This formula applies no matter what kind of business you have. Whether you’re a service business or you are a product-oriented business, a startup or a multimillion-dollar revenue enterprise, you can only influence revenue by changing one or more of these three variables. That’s it!
Considered collectively, the Revenue Ratchet Formula is a powerfully effective yet commonly overlooked approach to “ratcheting up your business’ revenue,” hence its name.
In subsequent blog posts, we’ll explore each of these three “revenue ratchet” variables and associated strategies in greater detail:
- The first strategy is to get more and better clients (and referrals); that means increasing the number of people who buy from you.
- The second strategy is to get them to buy more at one time; that means increasing the average purchase.
- The third strategy is to get them to buy more often; that means enticing buyers to keep coming back for more.
In the meantime, start expanding your mindset when it comes to increasing revenue beyond simply getting more buyers. Along with your efforts to get more and better buyers and referrals, also be thinking of ways to make it worthwhile for them to buy more from you each time they buy and for them to buy more frequently.
A couple of days ago, I was walking home from a nearby business meeting. As I stepped onto a sidewalk, I heard a teenaged girl who was walking behind me call out, “Excuse me, Mister?” Instinctively, I turned around and surveyed her facial expression and body language.
She was a petite girl, perhaps a life-hardened 18 or 19 years old. She seemed harmless but was clearly distressed.
She prefaced what she had to say with “I’m only 16 and I didn’t want to ask just anyone, so they didn’t take advantage of me.”
“Can you give me $.50 so I can take the bus home?”
She didn’t seem to be someone who was just putting on an act; instead, she seemed to be a young high school kid who had lived a hard life, not necessarily all of her own doing.
In a downtrodden tone of voice, she lamented, “Yeah, I don’t have enough money take the bus and I’ve got third-degree burns from being out in the sun all day.”
I noticed that her fair-skinned face was red and peeling throughout her cheeks. Unable to restrain myself, I instantly slid into doctor mode and said, “Well, those aren’t really third-degree burns, but they are pretty bad sunburns.”
She chuckled in embarrassed recognition of the obvious.
I pulled out my wallet, but since I didn’t have any change or small bills, I told her I would get change at the restaurant across the way. As she trailed behind me, she told me how grateful she was.
She seemed surprised and relieved when returned; in retrospect, she was probably afraid I was going to keep walking through the restaurant and out the side door!
I gave her the $.50. Then I wondered aloud, “Is that enough for the bus?” “No,” she optimistically replied, “It’s really $2.50, but I’m hoping the bus driver will let me ride anyway.”
So I said, “Here, take the other $.50.”
As I walked away, I heard her telling God to bless me.
I crossed a major street intersection still pondering this encounter. I wondered why she wasn’t in school. Maybe she was looking for work. Maybe she was running away from an abusive situation. I started making up all kinds of stories.
I wondered why she didn’t ask me for the full amount of the bus fare. If she had only asked, I would have given it to her.
This bothered me so much that I turned around and doubled back across the intersection to look for her. However, I could not find her; she had disappeared into the sea of cars in the crowded parking lot.
The lesson for all of us: Ask for what you need. You just might get it.
This girl asked for less than what she really needed. And that’s exactly what she got.
When I initially walked away after giving her a dollar in coins, I looked back and could see that she was scanning the parking lot, probably looking for who else she could ask for money.
For whatever reason, she was afraid to ask the full amount. Who knows, maybe she was afraid of being rejected. Chances are she was extremely embarrassed. Maybe she was afraid of being physically hurt.
You and I have been in this girl’s shoes before…
How many times has each of us been afraid to ask for what we really need?
And how many times have we gotten less than what we needed because that is all we felt we could ask for, because that is all we thought we could expect, or because that is all we believed we deserved?
When was the last time we experienced this? Today? Yesterday? Last week? Last month?
It’s an abundant universe.
Practice asking for what you need. Then be prepared to receive it!
Have you seen or heard about this? (If you have, why didn’t you tell me about it? It’s HILARIOUS and includes a serious business issue)… okay, so I’m late to the party…
This has been around for a while, but I just stumbled across it tonight …
In 2008, musician Dave Carroll was on a United Airlines flight from Halifax, Nova Scotia, to a gig in Nebraska, with a connection in Chicago.
As they waited on the tarmac in Chicago, a woman seated behind him suddenly exclaimed, “Oh my God! They’re throwing guitars out there!”
Dave and his band members looked out their windows and, indeed, United Airlines baggage handlers were tossing their guitars around.
Ultimately, Dave discovered that his $3,500 Taylor guitar had been broken during the extracurricular activities by the baggage handlers.
Various representatives from United Airlines refused to help Dave, immediately after he saw his guitar being thrown around and during the subsequent nine months he attempted to seek compensation.
In Dave’s own words, “They didn’t deny the experience occurred, but for nine months the various people I communicated with put the responsibility for dealing with the damage on everyone other than themselves and finally said they would do nothing to compensate me for my loss. So I promised the last person to finally say no to compensation (Ms. Irlweg) that I would write and produce three songs about my experience with United Airlines and make videos for each to be viewed online by anyone in the world.”
If you haven’t seen it already (yeah, I’m late to the party), you can see United Breaks Guitar video 1:
United Breaks Guitars video 2:
United Breaks Guitars video 3:
And here’s a video on lessons from “United Breaks Guitars” https://www.youtube.com/watch?v=_Hd8XI42i2M
I’ve gained a greater appreciation for the positive and negative impact each of us has the potential to make. And I’ve gained greater respect for the power of social media to spread a message of positive change.
I hope you enjoy these as much as I did!
This is an age-old question and quandary for many service providers in all types of industries.
I’ve heard of people embracing the policy that the first two hours with a new potential are free. Wow! That is a lot of volunteer time that gets racked up over the course of a business career!
One of the problems with not charging an initial fee is that you’ll end up wasting a lot of time with “tire-kickers,” people who are just shopping around for the lowest price and/or using other less- than -desirable buying criteria.
I also understand the reticence to charge an initial fee. You may scare off a potentially good client. However, charging an initial fee does serve as a filtering mechanism; just make sure the client knows about the fee BEFORE you arrange to meet with them.
Having said that, I suggest a different approach:
- After a potential client has contacted you and expressed an interest in speaking/meeting with you, have them fill out a brief questionnaire that gives you background on their situation.
- Then after you have reviewed that questionnaire, schedule a time to speak BY PHONE for up to 20-30 minutes. Then share any suggestions and recommendations you might have.
- If appropriate after that, offer a fee-based strategic planning session as the next step in working with you.
This initial session coupled with a questionnaire is not only an efficient approach, it gives you the ability to assess whether this would be a good client for you, moving forward.
Once you get comfortable and confident with this approach, you can actually charge significant fees for an initial strategic session.
Here is an example…
One of the bookkeeping services that I suggested this approach to ramped up their business to $100k in the first 12 months of being in business. 5 years later, $1M.
Coincidentally, this very day, I happened to get an email from the owner thanking me. This is a snippet of what he wrote: “All of our time together years ago, especially around paid-consultative sessions, is coming to fruition in some fun and interesting ways this spring. Several large companies who want to work together with us have approved 10-15 hour blocks of time at $150/hour for us to scope out our work together, so that we can give them an accurate proposal. Thanks again for the great coaching and belief years ago!”
So this approach can and does work.
Almost 15 years ago, I took an intensive series of courses that encompassed personal growth, business, and wealth building.
During one of those courses, we were given a set of the affirmations related to building wealth; afterwards, we were encouraged to practice them daily.
One affirmation in particular stood out for me: “I am an excellent money manager.”
I so badly wanted to become an excellent money manager, especially around my business finances, that I practiced that affirmation daily.
It didn’t take long for me to realize that I wasn’t going to become one, just by repeating an affirmation daily! I had the will and desire, but my biggest problem was that I had no clue what it meant to be an excellent money manager!!!
I tried to learn from books and audio programs. I kept an open eye for training programs. For years, I still had no clue.
That was until I met Dan Bowser. For over the past 34 years, Dan has worked on multimillion-dollar business mergers and acquisitions and business valuations. Since the time I was introduced to Dan, he has become a good friend, trusted advisor, and indispensable business partner.
Among many things, Dan taught me the three key elements that go into being an excellent business money manager:
- Keep accurate financial records
- Turn raw data into information you can use
- Use that information to guide your planning and decision-making
Let’s look at each of these elements…
Keep Accurate Financial Records
It’s a mind-boggling fact that a lot of people in business don’t keep accurate financial records. There are at least two reasons why they don’t: One is they don’t know how; the second reason is that they don’t really see the wisdom of it.
I’ve heard this justification a lot: “I’m not a numbers person.” Well, that excuse was eliminated decades ago with the advent of personal computers. You let your computer do the math. You don’t need to be a financial wizard to become an excellent business (and personal) money manager.
All it takes to keep accurate financial records is a tracking tool, typically bookkeeping/accounting software, and a willingness to use it regularly. That’s all. The problem is the “regularly” part.
The issue isn’t one of complexity; it’s not mechanically difficult to do this. The issue is that most people haven’t made it a habit to use their financial software.
Let me ask you this: Do you brush your teeth every day? Most people will answer “yes.”
Okay, then pretend that updating your financial records is like brushing your teeth; you brush your teeth to keep them healthy. Likewise, you update your financial records to keep your business healthy.
Your numbers won’t bite you; commit to developing the habit of using your financial management tools.
If you follow football or baseball, you know that you have to keep score, right?
But what do you think of this scenario?
“Who won the game?”
“I think the Mariners won it based upon some of the runs that I marked down.”
“Well, I didn’t mark down any at all at first. They played five innings and I think they scored a run or two in the first inning, but I didn’t start marking down the total until after the third inning.”
Yet this is how many people handle their business and personal finances! Your financial records and reports are the scorecard for your business. If you want to win the money game with your business, you have to know how to keep score. And you have to keep score!
Turn Raw Data into Information You Can Use
If you’re keeping accurate financial records, you have a collection of numbers stored in your computer. While those numbers can’t hurt you by jumping out and grabbing you, they also can’t help you by being stored on your hard drive.
You have to turn those raw numbers into reports that are meaningful.
Basic financial statements are a means for organizing your financial numbers so they are easier to analyze. Two of the most important financial statements are called the income statement and the balance sheet. The income statement (also known as a P&L statement, or profit & loss statement) organizes your sales (revenue) and costs and expenses. The balance sheet organizes your assets, liabilities, and equity.
Use Your Financial Information to Guide Your Planning and Decision-Making
Your financial statements are among your most important scorecards. They provide information that must be used in your business strategic planning and decision-making.
Unfortunately, for most non-financial entrepreneurs, looking at financial reports drives them crazy. Consequently, attempting to learning how to read and understand financial reports ends up on the “someday, would be nice” list of spectacular things to do in life.
I know, because for years, I was frustrated and upset with the financial lingo and formatting used in these reports. I also recognized that I was not alone: most of my clients had no basic understanding of financial principles and terminology. Without an understanding of the information contained in their financial statements, it was difficult to understand how well they were doing and what needed to be improved.
As Dan helped me to boost my business financial intelligence, we quickly realized we wanted to do something about helping fellow entrepreneurs become financially savvy. As we researched the market and talked with entrepreneurs, we learned that many recognize their lack of financial knowledge and the resulting difficulties it causes. Many made considerable effort to gain that knowledge. The problem they encountered is that the readily available material is over their heads, too technical, and not easily applied. In addition, there is a lot of confusing, misleading, incomplete, and inaccurate information out there.
If you have ever struggled to understand the basic financial statements that your accountant may have given you or that you get from your financial software, we have created just the resource you need: Financial Statements Made Practical: A Step-by-Step Visual Guide.
Most of us were not taught or never learned how to read financial reports, much less how to use them to guide our business decision-making. Whether you are an entrepreneur, business owner, manager, corporate executive, board director, or investor, knowing how to read, understand, and use basic financial statements is a vital skill.
Unfortunately, developing this critical skill has historically been more difficult than it ought to be. As I mentioned previously, far too many books and trainings are filled with confusing jargon, incomplete explanations, and frank errors in principles, descriptions, and detail.
This guide was created to put an end to the confusion so you can spend more time doing what you do best and still be financially savvy.
Get your copy right away.
Because All Business Owners Deserve to Be Financially Literate, Let Us Gift You the Make More, Keep More Training Program and Newsletter
Dan and I believe that all business owners must have a basic understanding of financial principles and terminology to increase their odds of success. For that reason, we created a free 24-part course, Make More, Keep More for Smart Entrepreneurs that also includes an ongoing email newsletter.
Some of the things you’ll learn include:
- Practical lessons and best practices for making more profit and keeping more of it
- A systematic way to understand and implement an effective business money management system
- a clear approach for creating a more profitable, valuable, and sustainable business
- A powerful link between marketing goals, sales goals and reaching your financial goals, and
- Tips and advice for building a more profitable, valuable, and sustainable business.
We invite you to register for this free course and the Make More, Keep More newsletter at www.SmartBusinessMoneyHabits.com/make-keep-smart-entrepreneurs
Over the past decade of working with entrepreneurs, I’ve noticed that the vast majority of my clients and scores of fellow entrepreneurs and colleagues I’ve met desperately need to become excellent business money managers.
The sticking point is that, for most entrepreneurs, making money is typically more fun and a higher priority than managing it. (More in a later blog post about why managing business finances ought to be a higher priority than trying to make the money).
So why bother becoming an excellent business money manager?
If you’re serious about your business, you must do both: make it and manage it. Making money without managing it guarantees that you’re limiting the financial potential of your business.
If you’re serious about building a more profitable, valuable, and sustainable business, I strongly encourage you take advantage of the resources I’ve mentioned here.