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Hi there.
Speaker:It's Sue and thanks for joining me for Tips and Talk
Speaker:Day. These are bite sized topics that I pull from community
Speaker:questions and things that I'm observing in the world of handmade
Speaker:small business.
Speaker:If you'd like to submit a topic,
Speaker:DME over on Instagram at Gift Biz Unwrapped.
Speaker:Before we get started,
Speaker:I'm gonna share a secret with you.
Speaker:One of my superpowers is the ability to get an enormous
Speaker:number of tasks and projects done each and every week.
Speaker:I easily meet deadlines,
Speaker:rarely forget to do something.
Speaker:I know at the start of each day what needs priority,
Speaker:attention and action type A personality.
Speaker:Yes, and a follow through on the Kobe assessment,
Speaker:which should have given me the clue,
Speaker:but it wasn't until people started commenting to me that I
Speaker:realized not everyone naturally knows how to do this.
Speaker:It's the biggest single contributor to the growth I always see
Speaker:in my businesses without spending hours and hours working either.
Speaker:It's about focus and doing the right things efficiently.
Speaker:Prompted by all the questions on how I do this,
Speaker:I went about finding a way to help you perform at
Speaker:a higher level.
Speaker:Two, I analyzed my methods and formalized my process,
Speaker:which is one many of my coaching clients.
Speaker:Now, also follow.
Speaker:You can use it too.
Speaker:It's all part of a tool called the Inspired Daily Planner,
Speaker:made specifically for gifters,
Speaker:bakers, crafters,
Speaker:and makers.
Speaker:Make no mistake,
Speaker:this is not your ordinary planner.
Speaker:First off,
Speaker:it comes with a video explaining my productivity strategy and the
Speaker:physical planner isn't dated,
Speaker:so you can start using it the second it arrives at
Speaker:your doorstep,
Speaker:and that's not all included for each day is a motivational
Speaker:or business building tip and plenty of space to capture and
Speaker:book in time for to-dos scheduled appointments and all those ideas
Speaker:that are now getting lost.
Speaker:You can watch the video for free and then get your
Speaker:inspired daily planner@giftbizunwrapped.com
Speaker:slash inspired.
Speaker:How many customers do you really need to reach your sales
Speaker:goals? Have you ever thought about it much less calculated it
Speaker:out for your specific products?
Speaker:Knowing this number can help guide your sales activities and reduce
Speaker:the overwhelm that comes with ambiguity,
Speaker:not knowing where you'll find people to buy your products and
Speaker:simply leaving things up to chance.
Speaker:This number is also the basis for gaining confidence in your
Speaker:business performance because you can understand and put in place various
Speaker:ways to get the number of customers that you need.
Speaker:As an added bonus,
Speaker:it may prompt you to re-look at your pricing,
Speaker:production, staffing,
Speaker:and even materials.
Speaker:My goal today is to help you figure out your own
Speaker:target customer number.
Speaker:It of course,
Speaker:varies by the product that you sell and your goals,
Speaker:so your required customer number can and most likely will be
Speaker:different from all the others.
Speaker:I've created two scenarios to demonstrate how to determine your number.
Speaker:I'm sure you'll be able to apply these examples to your
Speaker:own situation and figure out your own desired customer count.
Speaker:To begin with,
Speaker:I've made a couple of assumptions.
Speaker:First off,
Speaker:you've priced your products properly,
Speaker:so you've covered all of your costs and include margin.
Speaker:Second, I'm treating each sale as a single customer,
Speaker:so if someone buys from you twice in a year,
Speaker:it's calculated as two customers.
Speaker:Third, we're focusing here on retail.
Speaker:In other words,
Speaker:direct to consumer sales versus wholesale.
Speaker:Four, for this calculation,
Speaker:choose your best selling product.
Speaker:This will give you the most accurate ending number and one
Speaker:you can feel confident with taking action on five.
Speaker:All the calculations are set to the goal of $10,000
Speaker:in revenue a year.
Speaker:I chose this number because it's an easy one to multiply
Speaker:out based on your actual financial goals,
Speaker:and finally,
Speaker:keep in mind that this is an overall revenue number,
Speaker:not profit.
Speaker:Again, for ease of analysis.
Speaker:All right,
Speaker:here's scenario number one.
Speaker:The product is table runners.
Speaker:I picked this product because it's more likely a one-off sale
Speaker:versus a product that needs to be replenished.
Speaker:That's gonna come in our second scenario.
Speaker:What you're going to see demonstrated here is the difference in
Speaker:customer count as a price changes resourcing.
Speaker:Etsy, I found that custom made table runners go for anywhere
Speaker:from 15 to $50.
Speaker:Let's look at both price points.
Speaker:Dividing $10,000
Speaker:by your sale price,
Speaker:you would need to sell 667 runners at $15 and 200
Speaker:runners at $50,
Speaker:breaking that down into months.
Speaker:On average,
Speaker:you would need to sell 56 runners at $15 and only
Speaker:17 at $50 each month.
Speaker:Major difference,
Speaker:isn't it?
Speaker:Again, we're working here with an annual number of $10,000
Speaker:in revenue,
Speaker:so you'd multiply these numbers to match your annual goal.
Speaker:If your target was $50,000,
Speaker:for example,
Speaker:you'd multiply your number by five and so on.
Speaker:Having these numbers gives you a single product purchase customer count
Speaker:to reach.
Speaker:Another consideration that would lower your number is knowing what percentage
Speaker:of your customers buy,
Speaker:again, are repeat customers.
Speaker:In this case,
Speaker:maybe a certain number of customers want new runners for every
Speaker:season, or they buy products for gifts,
Speaker:things like that.
Speaker:This is one of the benefits of staying in touch with
Speaker:past customers,
Speaker:like sending emails to remind them about your products and trigger
Speaker:new sales.
Speaker:You'll note that in this scenario,
Speaker:the number of customers required is dramatically different based on your
Speaker:price. I mean,
Speaker:667 versus 200 is a lot,
Speaker:and remember,
Speaker:each sale comes with other time considerations over production too,
Speaker:like packaging,
Speaker:shipping, customer service interactions.
Speaker:Recently in podcast episode 393,
Speaker:we talked about how strategically pricing your product has ramifications throughout
Speaker:your whole process.
Speaker:It's actually a good one to listen to for a detailed
Speaker:pricing discussion overall.
Speaker:Now, let's look at scenario number two.
Speaker:The product I've chosen here is handmade soap at a $7
Speaker:and 50 cent price point,
Speaker:calculating the same way we did for table runners.
Speaker:At $10,000
Speaker:annual revenue,
Speaker:you would need to sell 1,333
Speaker:bars of soap or 444 each month,
Speaker:but hold on for products like soap candles,
Speaker:essential oils,
Speaker:bakery items,
Speaker:spices, and maybe yours,
Speaker:a single customer doesn't buy just one.
Speaker:For our soaps here,
Speaker:let's say that for most orders,
Speaker:people buy three at a time.
Speaker:That drops your customer count to only 111 for the year
Speaker:or 37 a month.
Speaker:Am I opening your eyes here?
Speaker:37 customers a month?
Speaker:Gosh, that could easily be one craft show day.
Speaker:Of course,
Speaker:I know you sell a variety of items.
Speaker:Some months sales are stronger than others and some customer purchases
Speaker:will be more or less than your averages,
Speaker:but running your calculation,
Speaker:as I've just described,
Speaker:will give you a realistic average number to work with.
Speaker:Now, what do you do with this customer count?
Speaker:It's time to put a plan in place on how you'll
Speaker:attract these customers already.
Speaker:Have a plan.
Speaker:Compare this customer count number to the results that you're seeing
Speaker:with your current plan and make adjustments accordingly.
Speaker:Incorporating multiple ways that people can purchase from you will significantly
Speaker:push your sales in your favor.
Speaker:You don't need to do all the things I'm gonna list
Speaker:right here,
Speaker:especially if you're just starting out,
Speaker:but having your own website,
Speaker:selling through a Etsy shop,
Speaker:attending in person shows,
Speaker:promoting on social media,
Speaker:sending emails.
Speaker:All of these are some of the major streams.
Speaker:Revenue comes into your business.
Speaker:I know dealing with numbers isn't the most fun activity.
Speaker:I know it isn't for me,
Speaker:but having a grasp on what's required to hit your sales
Speaker:targets, gives you direction on ensuring that that will happen.
Speaker:It's the difference between hoping you'll get sales and new customers
Speaker:versus seeing it play out in real life.
Speaker:That's a wrap.
Speaker:I'm a get to the point kind of girl,
Speaker:and this is what you can expect from these quick midweek
Speaker:sessions. Now it's your turn.
Speaker:Go out and fulfill that dream of yours.
Speaker:Share your handmade products with us.
Speaker:We want them,
Speaker:and they bring us both.
