Revenue calculation

Today I wanted to talk about revenue or sales or turnover. So it’s what income or what money your products and services bring in for you.

Now with the new year fast approaching, I thought it would be relevant for you to start planning out what is that number you want to achieve. So normally what I would say is, think about what the full year number is going to be and you’re probably thinking, Andoulla how do I determine this?

Well, look at what you’ve achieved in the past and say to yourself, is this what I want to achieve moving forward. If it’s not then set a realistic goal for yourself. Now you might add a certain percentage or whatever suits you but it’s got to be realistic. You know what, push the boundaries a little bit and who knows you might actually achieve it.

But then the question is, Androulla I know what I want to achieve as a turnover but how do I go about doing this? Well, let’s break this down for you right now. What you’ve got to consider are the products and services that you offer your customers or clients. You might have 2 or 3 of those products and you also know which one is performing really well. So what you do is, you start breaking those down and saying, well how many of those products or service am I going to sell over the year.

Then what we do is we break it down by months and so this is critical here where you have to factor in two things:

1. Is your product or service seasonal? So depending on what you’re offering, there may be certain months where you’re going to have peaks and then you’re going to have troughs.

2. When you take holidays. If your product or service is depending on you being there, then when you’re taking time off, you need to consider that in those times sales might drop.

So to recap, number one is setting a high-level target for the year. Number two is deciding which of those products and service that you’re going to provide and what is the pricing for each of those. Number three is breaking that down month by month to know when those sales are going to occur.

Now, how do you do this, what platform do you use? To start off with what I suggest is getting a blank piece of paper and doing those three steps I just mentioned. The other platform you can use is Excel, it’s free. Enter your products and services, the quantity, the pricing and it will calculate the actual dollars in total for you. 

EmpowerBeyond – Business Performance Solutions, focusing on people, process, products and services and improving productivity and cash flow www.empowerbeyond.com.au