Are Your Sales Down? By How Much?

Ask any small business owner these two questions and they can usually give you exact numbers.

But ask them the more important questions, "Why?" or "Which element of sales is down?", and most will look at you with completely blank stares. Or they will ask you a question right back, "What difference does it make?"

So I ask you, the reader, does it matter? Should I care why sales are down, or just that sales are down? Probably no surprise to you, but in my opinion, the answer to both of these questions is, "Absolutely, it matters."

If your industry average sales numbers are down 30% and you are only down 5%, are you doing something right or doing something wrong?

How about if your new customer sales are up 25% but your repeat customer sales are down 40%, do you have a marketing problem, an operational problem, or perhaps both? What if those numbers were reversed.

Unfortunately, it's my experience as a Small Business Coach, that most owners are incapable of asking these questions, because they don't gather the information necessary to even consider them. All they seem to care about is total sales and, surprisingly, to a lesser degree total profit. And no matter how much I try to get them to seek out more data, they continue to fall back on these big picture numbers - and stop there.

So what can you, as a small business owner, do about this? First, you need to recognize that you have a responsibility to your business to do whatever it needs to help it survive - not what feels good to you. And you can start with grasping the idea that your business needs you to start managing it - and stop letting it manage you.

The first step to management is measurement. So start measuring everything. Measure the number of times the phone rings (and what times it rings). Measure average sales every day, what kind of sales occur between 2-4pm on Tuesdays and which ones occur on Wednesday evenings. Measure your conversion rates, from both phone-in and website leads, separately.

But don't stop there. If you can think of it, measure it.

Do it all by hand at first (if you must). But over time, figure out how to automate it all.

And remember, the more you measure, the more you can manage. The more you can manage, the more you can begin to improve. The more you improve, the better the bottom line. And that's your ultimate goal - to improve your business and drive up profits.