How to Determine Your Weekly Break-Even and Goal Achievement Numbers

Audio Transcription

Alright alright, thrive nation and business coaching clients alike. Welcome back to the conversation was clay clark in the former ussba entrepreneur of the year in chop chop business coach. What we talked about today, my man, my man, we are going to go over to determine your weekly, break-even and goal achievement numbers a game. A sport would say:you’re playing a basketball, your kids playing basketball. You would want to know what your team’s score is if you’re on the sidelines, cheering for a 3rd grade boys, basketball game, you would want to know what the how many points are team has scored and then you’d want to know how many points did the other team has scored. So, therefore, you could tell who’s winning or not right right. This is one thing about cheerleading, that’s hard for me, because my daughters will perform and I don’t really know where they did good or bad or when they’re, winning or losing and then magically like 3 hours, later. Emerges, a second-place trophy, how to spell something:thin, air or third or first i, don’t know what’s happening. I am so, but for baseball basketball, football, these kinds of sports you can, you can know whether your head or behind there’s a scoreboard scoreboard. Exactly it’s over your business. You have to have a scoreboard and some of the key numbers you have to have. If you have to know how many deals you need, how many customers, how many clothes, does, how many paying customers, how many whatever’s you need to sell, just break even somehow big deal, I’ll chop, you see a lot of business owners. Yeah I know not. Everybody listen right now, other people that have no clue how many deals they need to break it. It’s very very difficult to meet with a business coaching client or somebody, and they are just kind of like well I know we didn’t lose money last month, which is where a lot of people find themselves right, you’re busy with the day today, and you don’t have the time or block out the time to go back and review these numbers and then you’re just kind of drifted along hoping that you’re making enough money to keep the doors open at the end of the month, and our whole goal here is to make sure every the leaves feeling hole and not full of holes ever want to talk down. It’s like I’m talking down to anybody or patronize anybody will go up to the coach you up.

The word charisma actually comes from the greek word charisma, with a cake charisma, which means the gift of grace. So my entire goal is to coach you up and not talk down to you, but I want to make sure we’re getting his check. What percentage of the customers that you worked with as a business coaching of the years you’ve seen what percentage of those client actually know their break even number? On a weekly basis, when you first work with it, what percentage actually know I would say about your help? Maybe 2 out of 10, so maybe 20%? You might have a really great batch of clients because I I’ve. Never, even though it’s just like a sports team with her out there playing the game, they’re working really hard to run up and down. The court goes fast as possible to try to score, but they get down to like the final minute of the game and it look at their coach. They say we had what’s happened in the coaches, know we’re down by 20 and i. Wasn’t cuz i, don’t know I mean so it’s weird deal all the sudden at the end of the month, their coach for the end of the game. The coach pulled me aside. Those guys we lost by like 28 points now and I just want you to know that was terrible. We’re going to have to change. Usually the coach is the accountant, ucd i, don’t normally says you can xbox by like a hundred and seven points and some people don’t even know there was a score right. So what we need to do. Stephen covey, the best-selling author of seven habits of highly effective people. He says you want to begin with the end in mind:okay or jack welch, the number one ceo of all time, who grew ge, buy 4000 % during his tenure. He says you got to eat. While you dream, you got to deliver on the short-range commitments while you develop a long-range strategy and vision and the success of doing both walking and chewing gum, if you will be getting it done in the short-range and delivering a long-range plan and executing on that all right.

So here are the specific action steps that you and i, and every business owner needs to take to get to a place of clarity. In your mind, where you know your weekly break-even point and your weekly goal, achievement points has to be weekly. You have to do this weekly. This cannot be a monthly, it’s going to be a quarterly. It has to be weekly. So here we go. You want to write down on a whiteboard in your office. The number of deals you need to break it. I, don’t know what I want you to get a big whiteboard whiteboard. Can you explain how to do that, that business coaching shower board move yeah, you can go to home depot and back in the in a pre-formed shower shower door area of lowe’s or home depot. They have these 4 by 8 sheets of dry erase board. It’s not works just as good, if not better. In there about $9, you pay typically a few hundred dollars for a whiteboard that size so awesome business hack and going there and put a little wood pool decor around it. Make it look nice.

Let’s do this on the show notes, let’s put a link to the youtube video that shows people how to make a whiteboard, and so after the after the show, what to put under the brake. Let’s put that on there any how to make your own whiteboard the right. Now, if you get the whiteboard I am not exaggerating, you need to put the number you need to break even on a whiteboard. You need to do that. Okay, if you don’t know just write a big?, and put it worse or everybody can see. It. Why, would you want to put the number somewhere where everybody can see it? This is a super important number I mean your cash flow. Is your blood of your business, and so everybody needs to know it needs to be top-of-mind. It needs to be out where it’s not some kind of weird strategic mystery that nobody knows what you’re talking about hey, guys, gals. We got to get this number before working and making money this month to keep the doors open. Okay. The second step is going to write down your daily to-do list. You know the one that you carry around with you all the time. The number of deals that you need to break. Even alright. You need to just need to be on the whiteboard in your office and on your to-do list. Then you want to ride down on the whiteboard the number of deals you need or customers. You need to achieve your financial goals, so don’t overcomplicate that we need to put on the whiteboard the number of customers we need to break even and the number of customers that we need to achieve our goals both on the whiteboard and both on the to do, and this is why that stephen, covey quote from a minute ago, so important begin with the end in mind. If you don’t know what these goals are, you don’t know what you’re working towards right right. So here’s what I want you do that in the next next next to action. Item I want you to create a list:okay, create a list of all a good print, a list of all of the expenses related to delivering your product or service. Some people would call this the cost of business coaching goods I’m not going to worry about the semantics. I’m saying make a list of all the expenses related related to deliver your product or service will take your plumber.

What does it cost? You four will put this on the show notes for:does it cost you for materials right the cost of materials? What is it cost? In terms of the actual goods needed, what does it cost in terms of right? What’s the cost of the labor? What are the cost of driving? What about the cost of insurance? What about the cost of credit card fees? All of the costs related to getting from point a to point b from delivering the product or service? What were all those cost think about those in this should take? You I would never seen this take less than about a good half hour to an hour to do this truck there, so many expenses that people probably have not bought it well, and you got to make sure that this list is complete right. You can’t just go around doing business whenever there’s a whole chunk of these variable or cost of goods sold that you’re, not counting into it. I work with a client, if you like 2 months ago, and they were just grind along they’re doing good, but we kind of went through all of these numbers and we got to the end. In the end the owner was like I was making money, but we weren’t they weren’t. Putting in some of those caught some of those extra cost on those variable prices-and he was like, oh my gosh-we got a raise our prices and so just see you in the numbers. Finally, after 15 years, okay, let’s raise our prices and now things are well I better. Let me just keep keep listing them off:cost of credit cards to cost of acquiring new customers like advertising, the cost of taxes, i, don’t think about that. They think about 100,000 a year. I know you don’t like the one gentleman last week you said I owe $45,000 in taxes and I said. Well, that’s what happened to come to write the cost of administration write. These are all things that caught cuz i, kept you up. If you’re a plumber, you have some, you answer the phone for your plumbing business and then you deploy a plumber who goes on the job, but someone else answered the phone somebody’s being paid to answer the phone. So what is it cost of that person, as relates to the cost of every late to delivering the service? You like to think about all that. Okay, what are all of the cost to do if you want to create a list of all of the fixed expenses on some common, fixed expenses, some of the expenses small, mostly each month to say? Yes, some of those are going to be like maybe salaried business coaching employees right there getting paid, no matter what, if we’re, building products are delivering on a product or service they’re getting paid your rent. That would be another one right. It doesn’t matter necessarily how much business you do, but the building in the office or whatever you’re in is going to stay the same little bit too, of the name of that I see. You know your electric bill just basically, these fixed costs are all of the cost that you’re still going to have your still going to owe this money, even if you don’t do $1 in business. These are costs that are going to happen every month regardless. So this could be I’m just listing off some of these to get you guys going.

Cuz I know. Sometimes it’s hard to look at a blank sheet of paper, not know where to start so. Printing costs, leasing costs electric bill because sometimes the ladies restroom gets stuck on there. Lol I know I fixed it and I took the pill 1 month got like 1,800 just left on the internet bill i. Think about this. The insurances, you got all the answer and stays you have the insurance. Is it there’s a lot of that workman’s comp insurance? What are so many insurance kinds of fixed costs right after you do all that stuff? What you do not you know the cost related to all of your the cost of living, the goods, the cost related to dexter, delivering the product or service cost. You only experience if you deliver a product or service. Let me know that and I know you’re fixed expenses. Your coach will work with you to create this thing called a pro-forma. Any performa is nothing more than a future projection of financial performance based upon previously known factual data. So it’s where you based upon knowing this information, then we can make a projection of future financial performance called a performa. It’s an educated projection right, you’re, not just kind of pulling numbers out of thin air.. You just have to do this now, here’s what we got to do this is where it gets all weird you’re going to have to make sure that after you know, all these business coaching expenses were going to put here on the show notes that you need to do this, but I just wanna make sure you’re going to create a pro forma now. I know that a performa is a big idea, but the whole point of a performa is you want to ultimately know you want to know from this thing and shovel put this on the show know you want another profit per customer and it just put that in parentheses, you want to operate at least a 30% profit margin.

If possible, 20 to 30% profit, you have to know the profit per customer. Okay, you have to know that and then you would say so what just make it very simple? What say that you’re, open you’re tall in your overhead, you have to bring at least $10,000 a month to break even in your average deals. 500 bucks, the dude wanted to say:okay, well we’re going to have to do at least 20 deals a month to break even, and you have to know that. Then you have to make sure that you know the number of the number of deals you need per week to break it up, break it down into the number of yours. You need per week and I’m telling you this changes everything in a business once everyone on your team knows this, can I tell you something to what I found with working with so many clients through this process is a lot of times. We don’t want didn’t even like i, don’t know if I want to look at this I done never really sat down, but almost every single time whenever we get through this and it’s kind of more of a clear picture literally just this week last week, I was working with the guy and he was like you just wasted my whole weekend, I’m going to be looking at these numbers all weekend and cuz he’s he just excited, but he knows what’s going on now. You have to know that in the final things you want to know the number of deals you need per week to achieve your financial goals and I’ll. Just give you an example of photography before I sold the business I knew that we need to hit $30,000 a week in sales to achieve my financial business coaching goals for that business, and let me tell you what every thursday every friday and we were at like $25,026.20, you achieve regular goal now. That is how you do it and we come back from the break. We’re going to teach you how to design your ideal schedule for the ideal life station