January is a great month to review sales performance so you're set up for a year of increased profit.
Review sales performance
If you know what you sell the most of – and what makes the most money – you can direct your marketing to those things, which will increase your profit.
How to review sales performance
- Calculate your margins – if you're not sure how, use our guide to calculating margins, breakeven point and markup.
- Make a list of your best products and services, or highest selling and margin.
- Review your marketing plan and find ways to promote your products or services – for example a small discount for multiple popular items, package less popular items with popular items to increase overall sales.
Increase sales of your best products and services by:
- placing your best items where your customer can see them – this applies to physical locations and online stores
- asking your customers why they buy your most popular items – you'll receive valuable insights to tailor your services and product lines
- regularly reviewing your mark-up policy.
Develop a marketing strategy
Marketing activities find and retain customers, and is one of the most important business tools for increasing profit in your business
How to develop your marketing strategy
- Set some marketing goals for your business – such as increasing customer spend and customer base.
- Look at the marketing tools you currently use and critically examine what's working and what's not.
- Develop a marketing plan that will achieve the goals set using the marketing mix – if you don't have a marketing plan, use our marketing plan template below.
Effective marketing activities include:
- gathering information about your market to identify the key characteristics of your target market – this will help to find the most effective way to reach your target clients
- reviewing sales data to understand repeat customer behaviour
- putting action plans in place that nominate who's responsible – including the timing of each action or each marketing strategy
- implementing performance measures to monitor the success of each marketing strategy you choose to use
- undertaking a cost/benefit review of each marketing strategy to make sure there are profit and cash flow benefits to the business.
Review your financing arrangements
For continued growth and profitability of your business, you'll need access to finance and the appropriate financing method.
How to review your financing arrangements
- Look at all the debt owed by the business – including any tax payment arrangements, credit card debt and debt to suppliers.
- For each financing arrangement in place, review all the terms, conditions and fees, and approach the finance provider for advice on how to lower fees and reduce compliance.
- Prepare a cash flow forecast and look closely at ways you can reduce your debt – if you don't have a tool to do this, use our cash flow forecasting template below.
When reviewing your business financing options:
- check if the finance you currently use is the most appropriate for the use of the funds
- consider other types of finance – such as crowdfunding and venture capital – when looking to finance growth in the business
- see if you can negotiate extended supplier terms and find better ways to manage your cash flow – these methods will not incur fees or compliance requirements
- stay in regular contact with financiers to develop a strong relationship, which will assist your business – this is particularly relevant if you have debt facilities with them.