Where is your business going?
Do you understand where your business is going? Too often people are purely reactionary when it comes to where their business is going. They take what they see and make decisions based on that versus controlling what direction they want to go.
I lose a client, I need a client. I have a down month, I need a big month. We're not really controlling everything. We're basically trying to play from behind.
When I started in this industry that was a big thing for me, I really just needed to take control and figure out where everything was. I would lose a client, I would go OK I need at least two clients because I lost one and need one to grow. If I had a down month, I was like OK I need to make this amount of money this month, but I need to make up for what I lost last month. I was forecasting, but I was way behind the 8 ball. I was trying to play from behind and I was never catching up.
Really what forecasting is, is knowing where your business is, knowing who's in your business, and knowing what you need in order to overcome your value months that are coming up. It is knowing how to maximize the peaks that are coming up. We're going to look at it that way as well so let's go into it a little bit and see what forecasting actually is.
Forecasting goes hand in hand with what we consider a 12-month marketing plan. The reason they go hand in hand is that we don't want to spend money on marketing that’s not needed. I'm not going to waste time. I'm not going to waste effort marketing in a season I know is going to be super hot. What I want to do is say: hey this month I'm going to lose XY and Z, I know I need to spend my time there, I need to spend my money there, I need to get more clients from that. That's where forecasting really comes into play. Understanding where your business is from top to bottom, in the month you're in, in the next 30 days, 60 days, 90 days make the peaks and valleys of the entire year break down.
Something that you need to look at, prepare for, and know is that New Years is going to be a huge fitness season, while summertime is going to be a huge sports performance season. Well, what about those little peaks and valleys in between? What are you doing to really maximize your business?
Well, let's think about it, what do we need to know to forecast? First and foremost, we need to know where your business is at, how much revenue you are fully taking into your business, and what you need to make it. Then we take a look at your clients, how many clients do you actually have coming through the door now? Coming through the door means active clients that are actually paying you, not just the trial sessions or the free sessions that you bring in. How many people are actually giving you money?
Then let's look at how much money each person is giving you. I know that some people have different membership types. So we really just need to get an average of how much people are spending within your business. Per month or per package, how much money is that individual client going to provide to you for your service?
For forecasting, we're going to need a couple of different things.
1) Know where your business is and where you need to go as far as your goals are concerned
2) Know how many clients are in your door know the value of what each client is worth
3) Know how long each client is scheduled to be with you.
When you know these things this allows you to really gain control of the flow of your business.This will allow you to know how the year will play out as far as money in the door and you can now leverage your marketing plans.You can now maximize your time, focus, and marketing dollars to eliminate as many valleys as possible.