Business planning involves knowing where you’re at right now in order to measure growth and figure out what you should be working on.
If you’re ready to take your handmade business to the next level (whether it’s through baby steps or explosive growth) over the coming months, it’s important to stop and look at where you’re at right now, this very moment.
Last week, we talked about why business planning is the “secret” to your success. This week we are going to dig a little deeper, because before you can start to plan, set goals, and plot a path towards reaching them, you have to know your starting point. That’s what this week is all about. Figuring out and recording where your business is at this very moment.
Business planning is all about data.
Did I just hear you groan? Yes, this means more time in front of the computer, inputting and analyzing numbers. But you can learn to work more efficiently and spend your time and money more effectively if you know exactly where you are starting from right now. When you input and analyze data, you can start to see what’s working, what isn’t and what’s starting to play out. In short, this week is all about starting a framework for helping you figure out where you’re at and how to record your progress going forward.
What are you going to use to track all this data?
Before we talk about some important things to keep track of, you first must decide how you want to record all this information.
- You can write it down by hand in a notebook.
- Open a Word document
- Or, create and use a spreadsheet.
For some things, I really prefer spreadsheets because I can spend some time up front and do all the formatting, add some graphics to make it pretty, enter my data, add some formulas, and then really look at and analyze the information. With spreadsheets, once I’ve created the master layout, I can use it over and over again.
Business Planning – some things to track so you know where you’re at right now.
Let me start by saying that you can look at this data in different places like Google Analytics, your shopping cart, your Ravelry or Etsy account, your newsletter client, etc., but what I want to stress is how important it is to have all this information in one place. When you look at things in different places your data is disjointed, and it makes it hard to put it all together in your head.
Traffic – to grow your handmade or creative biz you need to expand your reach by getting your products or services out there on the web and in front of your potential customers. That means getting more traffic to your website, shop, social media accounts, etc. It also means that you need to engage the people that come to your site by encouraging them to click around and read or see more that you have to offer. When it comes to traffic, good things to keep track of are:
- total visitors
- unique visitors
- bounce rate
- where that traffic is coming from
- your most popular posts or patterns (keep it simple maybe the top 5 or 10)
Lists & Subscribers – your next goal is to get the people who visit your site or shop to subscribe to your mailing list. Some important things to track are:
- Total number of subscribers
- Conversion rates for each of your opt-in forms and pages
- Pattern downloads for each of your patterns (free, paid, and launches)
- Open rates for your emails
- And unsubscribes
Customers – ok, so subscribers are great, but customers are better! Start by keeping track of:
- How many customers you have now
- How many new customers by day, week or month
- What they’re buying (keep it simple the top 5 or 10)
Income, Expenses & more – this is your typical accounting data and you want to look at your bottom line (the NET income). To determine your net income, you need to keep track of your income and your expenses, not to mention your sales or promotional discounts. This is the one area where I don’t feel spreadsheets are the right thing to use. With real bookkeeping software you can also track things like the total lifetime value of each customer, repeat purchases, refund rates, and best-selling products or services. I find it helpful to look at net income by month, but track income and expenses on a daily basis.
Week 2 Business Planning Tip:
If you started the spreadsheet in the Week 1 Business Planning Tip, open it up and using the lists above make notes about the things that you want to track.
Now, create a new Worksheet and start designing your Business Tracking Stats worksheet.
Here’s a look at my draft of a Business Tracking Stats worksheet.
What information do you want to track about your handmade or creative business?