In this lesson, we will create a 12-month financial forecast for your business, focusing on the revenue, which can be hardest when starting from scratch with no previous financial data.
In this course, alongside the video, there is a template we will use, which can be downloaded here.
As every business is different, I want to put several exercises together to get you the initial data; you need to predict the revenue your company may make in a financial year based on accurate data.
Target market: A target market, also known as a serviceable obtainable market, is a group of customers within a business’s serviceable available market at which a company aims its marketing efforts and resources. A target market is a subset of the total market for a product or service.
We will define your market size in the following lessons. However, there is
a great way to find the size of your target market through Facebook audiences.
Facebook audiences allow you to create an audience or group of people based on demographics, interests and buying habits.
Facebook will tell the audience’s rough size, which is excellent for understanding our market’s size.
To get to the Facebook audience, we will need to go to our business Facebook page -> “Promote a post”
Once we get here, we will have the ability to create an audience.
Here we can choose age, gender, interests, locations, behaviours, and demographics.
You should be able to create a detailed audience from this screen ( You should save it as it will be helpful in the following lessons. )
Here we can see the number of people in the audience, which for this example, can be the maximum number of people who would be interested in your product; this would be the potential market.
Here you can research or audit your companies and pay for their tax returns, find out their registered address and view their director.
There is also a website called Solocheck and vision-net.
Note you will not be able to get much useful information on sole traders and some companies will have differnet company names then their branded name.
We can get a wealth of information from our competitor’s websites with the following.
It is essential to understand the pricing model of your competitors and how it compares to your business; if you a service-based business that has a dynamic pricing model, asking for a quote can give you great insight.
Here we can see monday.com has Hulu, BD oil and much more; this is important to know as a business. If your business targets consumers or B2C look at the highlight reviews.
B2C: Business to customer
Every business should try to increase customer revenue and lifetime value. Looking at your competitor’s upsells will give you insight into what you could upsell you could provide to your customer, ‘s in-turn increasing lifetime value and value per customer.
Upsells: Upselling is a sales technique where a seller invites the customer to purchase more expensive items, upgrades, or other add-ons to generate more revenue. While it usually involves marketing more profitable services or products, it can be simply exposing the customer to other options that were perhaps not considered.
Lifetime value: In marketing, customer lifetime value, lifetime customer value, or life-time value is a prognostication of the net profit contributed to the whole future relationship with a customer
Looking at your competitor’s call to action is a great way to find out what they believe attracts customers and leads; this can be a free survey, consultation, free trial, or a 30-day refund. This is important for the next lesson when we do your marketing plan.
CTA: A call to action (CTA) is a prompt on a website that tells the user to take some specified action. A call to action is typically written as a command or action phrase, such as ‘Sign Up’ or ‘Buy Now’ and generally takes the form of a button or hyperlink.
Looking at the staff your competitors have is a great way to understand their labour needs and perhaps yours in the future while also giving you a minimum revenue your competitor is making based on average salaries.
Take, for example, a bakery with two bakers and a cashier. Your research shows the cashier was hired nine months after opening the bakery.
Their minimum salary is
24,000 x 2 = 48,000 @bakers
22,000 x 1 = 22,000 @cashier
The bakery must make more than 70,000 a year to sustain their salaries; there are other expenses and Employee tax; payroll accountants can add a lot to this calculation.
We should navigate to their pages where customers can leave reviews.
This can be Google my business, Linkedin, Facebook and Trustpilot.
As you can see, this photographer had 83 reviews; from this data, we can get three data points, the amount of reviews/sales, the timeline of the reviews, and the customer’s review message.
We could derive that this photographer has had 83 sales throughout his creation of the Facebook page; as we have researched our competitor’s pricing and upsells, we could derive the amount of revenue generated here. This is especially useful for competitors who are sole traders and don’t have tax returns or employees.
At least on Facebook, there is a date when the review was given. This can give you great insight into seasons differences in this company; for example, if the vast majority of weddings are around summer, this may not be oblivious for certain businesses. You can also estimate the max amount of supply the company can provide; for example, if there is no month with more than four reviews, perhaps that is because most weddings are on weekends, there are only four weekends, and the wedding photographers’ max output is four a month on average.
Here we see what customers like and dislike about the service; the negative review is critical, using that information to craft a CTA ( call to action ) and a service or product that tailors to them or fixes their problem. More on this on the Marketing lesson
The lifetime value of your customer is essential to know; it can vary between businesses, put simply the lifetime value after somebody has made the initial purchase is the number of other services or products they will purchase after the first.
Lifetime Value: In marketing, customer lifetime value, lifetime customer value, or lifetime value is a prognostication of the net profit contributed to the whole future relationship with a customer.