It’s time to check in on your goals.
Looking back on the first half of the year can provide a good indicator of what the next six months could be like in terms of sales and expenses, cash flow, savings, etc.
The mid-year point is also where we decide to either continue along the path we’re on if it’s working or course-correct if we’re not happy with the progress we’re making.
Here are a few things to look for to help you sort through your mid-year progress.
What was your starting income goal for the year? Are you at least halfway there? If you’re not, do you have any plans to recover – such as an upcoming product release or new service launch? Do you need to adjust the goal?
What’s your current operating profit margin? This looks a little different depending on whether you’re a product- or service-based business, but it is a good indicator of sustainability. That means, does the business have a good chance of survival based on its profits. The basic formula is (Net Operating Income/Product or Service Sales).
Know what it costs to run your business, and set a calendar reminder to review those expenses periodically. Cancel services that you aren’t using, and evaluate the return on investment for marketing and advertisements, as they can add significant expense and reduce your bottom line.
Cash on Hand, Savings, Reserves
If you didn’t get a new client or sell a product this month, could your business survive? Would you be able to pay your expenses, yourself, and any assistants?
Creative businesses tend to have one thing in common – irregular cash flow. Whether you’re a wedding planner, graphic designer, or coach, your income fluctuates based on the number of clients you currently have or services you sell. With products-based businesses sales can be seasonal or based on current trends.
Having cash on hand for when these lulls in your income occur can provide additional security that you’ll be able to run your business each month with no worry about having enough cash to float you.
Have you checked in with your finances yet? What would help you have more confidence about knowing your numbers? I have a few spots available for discovery calls, and I’d love to talk with you to see how I can best support you.