Is Your Online Business Making Enough Money? What the Numbers Really Say
Your business numbers can tell you much more than how many invoices got paid, or how much money is in your business bank account at the end of the month.
Tracking your finances is a good habit, and they can give you an idea of how your business is currently performing. However, there are even more numbers you can track and evaluate to check the health of your business. You can even use these business numbers to increase your revenue!
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Profit and Expenses
Before you think about boosting your revenue, it’s important to understand how much it costs to serve your customers, first. You must understand your expenses as well as your profit.
Your expenses include everything that’s involved in creating, managing, and delivering your product or service to your clients or customers. Of course, this looks a bit different for everyone depending on the type of business you run.
For an online business like yours, your expenses might include things like:
- Office equipment like computers, laptops, printers, speakers, and furniture
- Services like email, website hosting, and internet
- Software and subscriptions like project management, CRMs, or payroll
- Training and development courses
Once you know what goes into serving your customer base, you can measure your numbers against your profit. Then, look for opportunities to trim or cut expenses — without sacrificing the quality of what you offer.
Here’s a tip for decreasing your expenses: Keep a list of your monthly and annual subscriptions and payments. You’d be surprised at how much you can save when you eliminate those that you no longer use!
Sales data
How much are you currently making in sales? You have to know this number before you can plan how to increase it! Your sales data can tell you about revenue, and your sales by offer numbers will tell you what’s performing best among your customers.
Your sales by offer data is so valuable because you can figure out why and how your top-performer is so successful, and apply that information to your other offers. On that same note, you can figure out how to improve your weakest offer.
Overall profitability is an important metric, but another that is often overlooked is the profitability of each of your offers.
Say you have an offer where its main purpose is to drive new leads into your business. It’s probably not your top-performer. It might even break even or “lose” you money, because that’s the cost of bringing in new business.
But as you work your way up through your offers by value, make sure that your high-value products are actually net positive when you look at their expenses.
Expenses can be sneaky, too. Like time spent answering support questions or creating content for community groups. You might find that one of your favourite products isn’t actually adding to your bottom lines like you thought! This is why it’s so important to pay attention to your numbers.
Leads
Speaking of leads, what if you have a steady stream of leads but your sales numbers aren’t quite matching up? It’s time to dig into those numbers to see how you can improve them.
And you have to look beyond your number of leads. Are you capturing quality leads?
I encourage you to see where your conversion rate differs depending on the source. This is one area where Google Analytics can be a wealth of information when it comes to traffic sources.
One possible reason for your leads is that you’re not nurturing your leads consistently enough. Step into your customers’ shoes for a moment, and imagine that you’re interested in an offer. How are you contacted? What information are you given? Are you followed up with more than once?
Step back into your shoes and reflect on your current business processes. Maybe you’ve realized that you can do a better job of nurturing prospective customers.
Conversions
Let’s say you’re getting a decent number of leads on your sales page, but they’re just not converting. It’s time to analyze your sales funnel and pinpoint what part of it needs improvement and optimization.
Funnel conversion rates are incredibly powerful; small adjustments that lead to small changes in your conversions can impact your numbers greatly!
Imagine that you sell a course for $1000. Your data tells you that out of 1000 site visitors, 100 move to your checkout page, and 10 people actually buy. From sales page to checkout, your conversion rate is 10%. From checkout to purchase, it’s also 10%.
Overall, that’s a 1% sales conversion rate that brings you $10,000.
Imagine that you increase each conversion rate in your funnel just by 2%.
Now, 120 people move to checkout out of 1000 visitors. A little over 14 people buy your course. You’ve brought in $14,000…which means your revenue has increased by 40%! Isn’t that powerful?
Changes to your sales funnel don’t have to be big to have big effects. Look for opportunities to improve your sales funnel based on your data. Then watch your numbers and conversion rates grow!
Look to your business data to increase your revenue
Profit and expenses, sales data, leads, and conversions. These key business numbers can tell you so much essential information about your business. They can help you make confident decisions based in fact for your business, too.
And that’s just the start of the numbers you can use to ensure you’re not leaving money on the table! If you’re wondering which metrics can give you even more valuable information, I have a resource that can help. Download 5 Questions Your Data Can Answer for You and discover what else you can learn from your business numbers!
