Everyone likes new beginnings. It gives us a chance to put away the mistakes of the past and focus on all the awesomeness that will come in the future. We set goals, make resolutions and promise to do better – for ourselves, our business, our health, our family, and the list goes on.
But I think by now we also all know, these tend to fail. Not because we don’t care, don’t want to achieve them, or are lazy (binge watching netflix isn’t lazy, right?); but often because we didn’t look deeply enough at what we achieved the prior year and make realistic adjustments based on our starting point. So today is all about putting 2015 in review. Let’s go through the good, the bad, and the f’ugly to uncover where we killed it and how to expand on that; and what held us back and how we can remove those obstacles or shift our focus.
Setting Goals for Your Business
Our first step in setting goals for your business is doing a year end wrap up. I firmly believe that you can’t set where you want to go, without knowing where you’re starting from.
The first section to review is your financial goals. Afterall, your business was likely set up with the intention to make some money honey. If not, no worries! You can skip ahead to the bottom sections on the first page to review Personal + Customer goals you little liar. (I kid, I kid)
[bctt tweet=”Before diving into resolutions + goals, take time to reflect on the past year with @theshopfiles’ year end wrap up!” via=”no”]
So, how did you do this year?!
As an online shop or small business, review these key metrics to compare actual versus plan. Didn’t set a plan this year? Look at your prior year’s results or review month over month to see how you’re trending (even if it’s small!)
Not a small business? No problem – I included a third page that addresses Blogger financial goals, so you can skip ahead to that section below!
If you’re unsure of any key metrics, I wrote a super sexy overview on the financial basics: Retail Math 101
Key Metrics to Review
Is your business growing, maintaining or declining?
Are there certain vendors or categories growing/declining faster than others?
What strategies can you put in place to continue growth?
Do you need to exit declining areas of business?
Profit Dollars & Rate
This is probably the most important as its your money in the bank or opportunity to re-invest in your business.
Were certain months more profitable than others?
Which vendors/categories are your most and least profitable?
What strategies can you put in place to grow your most profitable vendors/categories?
Can you adjust pricing or renegotiate costs for your least profitable areas or do you need to exit your bottom producers?
Average Order Value
How much does your typical customer spend per order? This can be a good indication of how well you’re meeting your customers’ needs, how effectively you’re upselling + cross-selling, and provides insights to determine free shipping thresholds or creating bundles/packages.
Free Shipping Thresholds – if your shop offers everyday or promotional free shipping based on order size, this metric helps you determine what increase you’d need to see per order before offering free shipping. This would theoretically increase your sales + profit as you’re convincing customers to up their average checkout in order to ‘earn’ free shipping. Therefore the free shipping offer becomes more of a promotional effort than strictly an expense of doing business.
Creating Bundles/Packages – if you can determine your average customer spends, let’s say, $50 per order, what can you do with that? Well, we could put together an amazing package of items that would sell for $60, or test promoting items near our $50 range and suggest a lower-price “add-on”; thereby promoting at a level our average customer is already comfortable spending and providing a small incentive or suggestion to push it a bit higher. How can you provide extra value by bundling items (or services) while creating an uptick in your average order?
Learn more about alternatives to discounting your products here.
Cart Abandonment Rate
How often does your customer place items in their cart, but then leave your site without checking out? This can be one of the most frustrating metrics for online shops and small business owners since you essentially had them, and then for some unknown reason they walked away. Unlike in a store where you may be able to answer their questions or provide help, online you’re left guessing. There are some common reasons you might be losing them (here’s a post explaining 7 reasons customers leave and actions you can take.) so review this metric so you can test and track your performance and try to hone in on reasons or specific time periods where you see improvements or worsening rates.
Shipping Cost as a Percent of Sales
Good metric to be aware of as competition increasingly leaves online shops fighting over free shipping. Customers have more and more come to expect it, yet it’s something that can quickly erode profit margins if left unchecked. Again, tracking this metric can help you test and discover your optimal free or discounted shipping threshold; or months where you incurred higher expenses.
Are there certain months your average order value is down so shipping becomes a higher percent of sales?
How many orders go out with a single item and therefore may have a higher shipping cost as a percent of sales? Are there commonalities to those single-ship items, can you promote an add-on or target a specific cross-sell to help offset that cost?
You’ll likely need to break this guy down, but keeping track of your advertising spend is another super important aspect in growing your business. It allows you to understand where your biggest return on investment comes from and how you can maximize those opportunities.
A few expenses to include:
- Paid advertisements on Facebook, Twitter, or Pinterest (promoted pins)
- Sponsoring blog or Instagram posts
- Printing flyers, coupons, branded collateral
- Purchasing stock photos, custom fonts, or outsourcing graphic design work for marketing materials
Consider including time spent (at your ‘hourly’ rate) creating your own promotional material, updating coupon codes or pricing online. As your business grows, this can help you determine when it may be the right time to outsource these activities to a virtual assistant or hire part time help and give you a baseline for payment terms.
Re-investments in Your Business
My favorite one! Did you have some room in your budget this past year for investing in you + your business?
Were their classes, e-courses, or e-books you bought to sharpen or broaden your skills?
Did your business need a big investment piece to grow? (new MacBook, design software, photography equipment, website design, etc)
Financial Goals (Blogging)
Advertising Spend & Re-investments will look similar, but below are some financial measurements specific to monetizing your blog if you run one with your shop (which you should!).
Total Revenue – Expenses = How’d you do? Be sure to keep an accurate picture of your expense line. I know as a blogger it can be easy to write off items as part of your regular purchases (a new notebook here, stock photos there), but really ask yourself if it’s a purchase you’re only making to drive your blog and keep track of it so you get a better picture of your true profitability. This will only help should you ever make the move to full-time (you’ll be watching your pennies then!)
- What percent do they contribute to your total income?
- Based on expenses to execute (time + resources), should you be growing or declining this area of revenue?
- Which brands or product categories did you enjoy working on?
- Have you determined your optimal rate?
- What were your best + worst performing posts?
- Did you feel the sponsored posts you worked on this year reflect the tone and direction for your blog?
- What percent do they contribute to your total income?
- Are there programs you should work to grow or lessen your focus based on performance?
- What percent does this contribute to your total income?
- Where on your site had the best / worst performance?
- Are there different ad placements you should test?
- Do you operate a small shop or sell e-books, prints, etc?
- What percent does this contribute to your total income?
- Comparatively, how much time do you spend on the behind the scenes work?
The second section is Personal, Customer + Audience goals. These are a bit fluffier as there’s no hard numbers behind them, so settle in, grab a glass of wine (or coffee, I guess it’s early, huh?) and let’s get to assessing ourselves.
Growing a small business can be extremely satisfying – you’re the boss afterall! But after the initial excitement and all the long hours, what keeps you going?
What do you need to feel personally satisfied so the day-to-day doesn’t bog you down?
How much time did you spend on personal passion projects each week or month? How much would you ideally like to spend?
Action Step: Write down 3-5 each of your favorite and least favorite business activities. How can you adjust your goals + time next year to better align with your passions?
I think we all know our business wouldn’t be much, if anything, without the support from our customers. So, what was their experience this past year?
What were your biggest wins that you’re most proud of?
Quick customer response time? Did you save a sale? Turn a horrible experience into something really positive for the customer?
What did you totally mess up on? (eek! happens to all of us)
Did you react poorly to a negative review or comment? Were their delayed orders or incomplete information on your site?
Action Step: Write down 3-5 each of your best and worst handling of a customer service issue. What changes can you make to your customer service guidelines to improve next year?
Here are 10+ ways to improve your customer experience, check them out and see what you can put into action today.
Bonus Points: Create a quick customer survey! Ask them to tell all – what they loved, what they could do without and if they’re recommend to a friend / buy from you again.
This section is great for bloggers + shop owners alike as rather than focusing on customer service issues, we’re looking at what else they may need from you that you’re not currently providing, and may not even be part of your current strategy.
- Has your audience shared a topic/category they’d love for you to explore?
- Are there new ways of sharing your content? Maybe they’d prefer more videos or podcasts than always reading product descriptions or blog posts?
- Does your best selling product give indication of natural line extensions you could add to better meet their needs?
- Overall, is your audience engaged in your story and brand?
- What are some action steps you could take today to build a better relationship?
Some Ideas to Consider:
- Communicate your vision more often so they feel part of your growth.
- Ask for feedback.
- Set up ‘office hours’ to dedicate time each way to ‘real-time’ communication.
- Ask for their input on brand partnerships they’d like to see.
- Comment and be involved with their social media outside of posts related to your business.
Action Step: Write down 3-5 ideas your audience has shared or which you will explore that benefit your community.
anyone else need a break!!? you’re almost there!
grab a coffee + lots of carbs, and let’s do this. #2020wegotthis
One of the “easiest” ways to grow your business is by reaching more potential customers. And of course, I say “easiest” because there’s nothing truly easy about it, more like hard work + strategy. However you can’t grow if you don’t know, right?
Average Monthly Visitors (Blog or Shop)
- How many eyeballs are on your business each month?
- What month had the largest year over year growth?
- Did your growth efforts align with actual increases?
- Is your growth steadily growing each month? Or does your business have natural shifts in busy / slow periods?
Instagram / Twitter / Facebook Followers
I don’t necessarily advocate to be on all platforms unless you have the time, are seeing traction and know your core customer is there; otherwise I recommend picking 2-3 you can really focus on and deliver strong messages there. Personally, I use Instagram, Pinterest, + Twitter in that order of promotion and time spent; yet have seen traffic results in this order: Pinterest, Instagram, + Twitter. So right there that’s something I can change for next year and start putting more efforts behind my Pinterest strategy; while still maintaining a strong presence on Instagram + Twitter as I feel those are more important for growing connections and building a community around my business.
Where is your time spent + how does that compare to your results?
How consistent are you on each platform? What is your ideal posting schedule?
I chose to track Pinterest impressions as that’s a truer measurement of your reach and influence on the platform. There are a few different segments you can review: I prefer to look at impressions from “Your Pinterest Profile” + “Activity from your site”, but ultimately I care the most about the activity from my site since that’s what will drive traffic and generate sales/profit.
You should also set a goal for your followers as that growth will impact and increase your total reach, but don’t get too hung up on the numbers. Pinterest is the one platform where spread is more important than pure followers since every re-pin acts as another marketing effort and continues to cast your pin into a wider and wider net. Win-win-win-win!! I’m working on a little post now about my mini-Pinterest win and what I learned from this surprise traffic.
This is one area that’s had a huge resurgence lately. Everywhere you read talks about how to grow your list, what to send, how to develop a value-driven relationship and ultimately how to maximize sales.
It’s one of my top areas of focus for 2017 as I know it’s one of the only places I have full control over the marketing message, who I’m connecting with, and the action I want them take. Email subscribers also really want to hear from you! They chose to hand over their private email address so you know they’re interested and not just social media bystanders.
Not sure how to get them on board? Try one of these email opt-in ideas!
- How would you rate your promotions this year?
- Were you prepared in advance?
- Did you start promoting too early or too late?
- Was your message clear?
- What mediums did you use to communicate? Should you have promoted on multiple platforms or used a different method?
Action Step: Write down 3-5 of your marketing wins + losses. What can you improve upon for next year?
Social Media Goals
- Where are you customers most engaged? Are you seeing a biggest payoff in one platform than another?
- What are your favorite platforms?
- Do those two align – are your favorite hangouts the same as your customers? What can you do to better appeal to your customer on your platform of choice, or what can you do to enjoy theirs more?
- How much time do you spend on creating + promoting on social media?
- How much time do you spend connecting, commenting and interacting with your customer and other business owners?
Action Step: Write down 3-5 social media wins + losses. Did you have a strategy to gain followers on a particular platform? What images on Instagram received the most likes / comments?
Whew! You did it! Reviewing our past year’s wins and especially the losses is no easy task! But I know setting your goals for 2016 will be that much easier once you’ve taken the time to understand your opportunities and risks from the prior year.
So sit back, grab a glass of wine and enjoy the rest of the weekend. You definitely deserve it! And let me know how it’s going or what areas you need help with by tweeting me at @theshopfiles! I’d love to hear from you and let’s use #2020wegotthis to kick start your best year yet!
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