The Most Important Thing to Focus on in Your Business, and Why
One of the most common questions I’m asked is,“What’s the most important task that I should be focused on in my business?”
Well, we know there are lots of tasks to be focused on. But today, I want to talk about one of the most important ones.
My name is Scott Lollar and I’m a DYB coach and today I want to talk about why sales is possibly the most important task that you should be focused on because out of sales, all other activity flows and without sales, you have no business.
So where do we start? We start with revenue. What’s your target revenue for the year? You can do this by taking some historical data from where you’ve been and adding some growth to it.
And even a stretch amount on top of that. If you set easy goals, then you’re very likely to attain them.
But if you hit stretch goals with focus, you very likely will attain those too. So go ahead and make goals that are realistic but stretch you a bit.
So from that, we can determine how many leads we need and how many jobs we need.
So, how do we do this? So, first of all, we take our average job size. What is the average job size in your company?
Most people know this, but if you don’t this is your first homework assignment. It can be done pretty easily. If you take last year’s revenue divided by your number of jobs, you’ll have your average job size.
So for our example let’s say $5,000 is our average job size. So, in order to do a million dollars in revenue, we need 200 jobs, this is our first piece of data.
Now, how many leads do we need in order to do 200 jobs? In order to come up with this, we need our close ratio.
Most companies also know, but if you don’t, this is your second piece of homework, you need to be tracking your leads to close ratios.
In either your estimating programs, even quick books or third-party apps like pipeline deals. Track your leads and track your closing. This is very critical.
So let’s say in our company our close ratio is 50%. That’s a little ambitious but doable and it should be your target.
So now we know, that to sell a million dollars of work at $5,000 average job size, we need 200 jobs. And in order to get 200 jobs at 50% close rate, we will need 400 leads.
Now our formula is really taking shape because now we know that if we have 400 leads at 50%, we will sell 200 jobs at $5000, is a million dollars. This is the law of averages.
So, how do we do this? Well, this is still a pretty big number. I would suggest you break it down by months.
Now, some of us that are in cold weather climates know that our revenue is not straight across all year long.
So you need to take your historical data and decide what months you do more, what months you do less, and plug your revenue of million dollars in tracking back using that data.
Once you have that, you can determine in any given month how much revenue, how many jobs you need, and how many leads you’ll need to attain that revenue for the given month.
I suggest you even then break it down two weeks. So for example, in July, if our target into being $80,000, we know we need 16 jobs and we know to get 16 jobs we need 32 leads.
We can even break that down into weeks. So let’s say in Week 1 we need $20,000 in revenue and we know that’s 4 jobs and we know that’s 8 leads. So, tracking this over and under, per week throughout the year, we can see if we’re on track or not.
And if we are not on track, we can always do some additional marketing activity, maybe reach out to more people, send an extra email or even pay for some additional marketing activity.
If we track this, and stay on track, by the end of the year because of the law of averages, you will have achieved a million dollars.
I hope this helps you? And if I can serve you in any way reach out to me at firstname.lastname@example.org, I’d love to hear your success stories or help you in any way if I can.