Business planning | Numbers Knowhow

Customer Lifetime Value: How To Calculate It?

Mahmood Reza — Fri, 09 Feb 2024 08:32:30 +0000

Why Is Customer Lifetime Value Important? As a business owner, you need to cater to your customers. Having satisfied and loyal customers is extremely vital to the growth of all businesses since, at the end of the day, the gains, and the profit one makes are due to the customers. However, not all of your customers can be put in the same basket. Each has a different impact on your business i.e. has a different worth. In the business world, we refer to that as customer lifetime value. But, what exactly is customer lifetime value and how do you calculate it? Further on in this blog, you can find the fundamental details relating to this topic: what is customer lifetime value (or CLV) and how to calculate it. What is the customer lifetime value? Customer lifetime value is a metric that presents to you how the profitability of your business depends on your customers. It shows you how much income you can expect from your customers. Certainly, making a profit is the goal of any business, so knowing your customers, knowing their value can be rather beneficial for you. It can help you make better decisions about when and how […]

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Product Grouping & Its Financial Power

Mahmood Reza — Mon, 08 Jan 2024 08:54:46 +0000

Have you ever thought about product grouping? Or has it been something you’ve put on the shelf and it’s been collecting dust? How does it get you a greater financial understanding of your business? How product grouping can help Above all by looking at your business in terms of product groups, you can gain powerful insights into: where your money is coming from, and where it’s going. This information will help you forecast for the future and make your business more profitable. So with this knowledge in hand, you’ll be able to take control of your business and propel it forward. In other words you’ll have a much stronger framework for making decisions that will benefit your bottom line. Watch this video to learn more about the financial power of product grouping! Key takeaways This short vlog will enhance your knowledge, specifically about: How to group your products How to use product groups to analyse your numbers With this in hand, whether you’re a start-up or established, you’ll be able to move forward in your business. You’ll get that essential information which will be the basis for your future decision-making. Because you’ll know which groups make money, and which […]

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The Mistakes In Borrowing Money

Mahmood Reza — Tue, 12 Dec 2023 12:14:00 +0000

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Final Steps Of A Business Plan

Mahmood Reza — Fri, 01 Dec 2023 11:51:10 +0000

Each business plan needs to be meticulously constructed in order to be effectively used in the future. This blog will discuss the final steps of a business plan and give you an overall idea of what needs to be done. The three groups that encompass these final steps are the following: Management Financial forecast Presentation Final steps of a business plan: management One of the final steps of a business plan is defining the management roles within your team. You can achieve this by outlining the strengths and weaknesses of each team member as well as describing their background and experience. Consequently, you will have a clear overview of who in your team is suitable for a certain role, and make the allocation accordingly. Furthermore, you need to clarify how you intend to cover the key areas in your business, such as production, sales, marketing, finance, and administration. Lastly, you need to maintain your management information systems in good condition. This includes the management accounts, sales, stock control, and quality control. How committed are you? Businesses often further develop and prosper thanks to partnerships and investors. So, if your goal is to attract banks or potential investors, as a […]

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Pricing For Profit: 5 Key Numbers

Mahmood Reza — Mon, 23 Oct 2023 10:47:16 +0000

Wondering how to price your products or services so you can make a profit? It’s not as simple as it seems because it involves several things to consider. That’s why figuring out the right price is one of the biggest challenges business owners face. There are two main financial outcomes of pricing and it’s so important to understand them. And to know how to calculate them. Once you know what those two outcomes are, the next step is to consider five key factors that will help you set a price for your product or service that meets your business objectives. And finally, I’ll show you a FREE online pricing calculator that makes it easy to do all this math for yourself. Watch this video now and learn how to price your products or services for success! How to price your products or services so you can make a profit You need to make sure you’re covering your costs and making a profit. In this video, I’ll explain the two main financial outcomes you need to meet: Time availability, and Quantity of time. These two are essential to take into consideration because nobody can devote all of their time to […]

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Performance Management System: 5 Tips

Mahmood Reza — Fri, 13 Oct 2023 10:57:38 +0000

Do you need a system that will track the performance of your employees in a consistent and measurable way? Then you need a performance management system for your business! Wondering how to create one? You’re in the right place! In this video, I’ll be talking to you about the five steps you need to take to create performance management system that’s perfect for your business. A balanced scorecard approach This is a performance management system aligned with a company’s core strategic goals. It includes the performance objectives of the business which it monitors, measures (and changes if necessary) with the end goal of achieving the company’s business plan. Why it might sound scary to business owners Creating and implementing a performance management system for your business can be a daunting task. There are so many factors to consider – from setting goals and measuring progress, to providing feedback and handling termination procedures. There are five steps to creating a performance management system are: Identifying your critical success factors, Setting your KPIs, Figuring out your initiatives, Reviewing your progress, and Taking action. This list might seem intimidating at a first glance, but having the right tools and advice, will definitely […]

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What Is Turnover In Business?

Mahmood Reza — Sun, 06 Aug 2023 15:07:27 +0000

What is turnover in business? We’re here to answer that question for you. If you’ve been looking to get a grasp of what turnover is, then it certainly doesn’t help that there are different terms for it. As a result, you’re left wondering what they mean when they use all that jargon. By the end of this blog, we will clear all of that confusion. So, without further delay, here’s what this short blog (and vlog) covers: What is turnover in business (aka definition) To begin with, it is the standard term used by UK limited companies and when accounts are filed. HMRC use it in for the self-employed, large and small, and also for partnerships, large and small. Turnover also comes up for the Fifth Self Employed Grant. First thing is first. Let’s define it. What is turnover in business? It’s the amount of money received from sales for a given period of time. I know it doesn’t help that there are different terms for turnover – revenue, sales, and takings – but don’t worry, they all refer to the same thing. So, whenever you hear people talking about the company sales or revenue, they’re essentially talking about their […]

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Using Target Costing For Pricing

Mahmood Reza — Mon, 31 Jul 2023 10:29:30 +0000

Do you want to reduce your costs by 25% to 30%? If so, then target costing is the right choice for you. Therefore pricing using target costing can help you cut costs without sacrificing quality. Traditional and target costing – differences The two methods share things in common but also have differences. You choose the method most appropriate for your target customers and product mix. Traditional costing (or cost-plus costing) is the most used method for pricing goods and services. It’s based on adding an average overhead rate to the costs of manufacturing products. The focus of target costing is reducing waste from the start of production. Don’t wait until products are made. Moreover, this means that every step of the process is designed with cost-cutting in mind. You gain better prices and margins for your business. Target costing was developed by Toyota Motor Corporation to reduce costs while increasing the quality of its products. It’s now widely used throughout many industries from automotive to consumer electronics. Target costing has been around for many decades, much longer than cost-plus costing. Listen now to find out more about how target costing works! Conclusion If you’re interested in dealing with pricing and […]

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Effective Business Partnership Tips

Mahmood Reza — Sat, 15 Jul 2023 10:24:25 +0000

Making your business partnership work can be daunting if you have never had a partnership. If you intend to start a partnership with a friend or a family member, you should consider many things. Do not assume that just because you get along in a personal relationship you will have success in a business partnership. Adhering to a few simple steps will ensure that you have the best experience in any business partnerships you decide to have. Read on to find out how to keep your business from suffering heartaches when forming partnerships. Align your values One of the fundamental steps in ensuring that you have a successful partnership is to have the same starting point. Specifically, this means that you need to have similar values. Sit down with your potential candidate for the partnership and discuss the overall vision of your business. For example, see that you have similar (or the same) answers to these questions: Where do you see the business going? What are the dreams and goals of the business? You must establish the key goals, values, work ethics, and environment in order to have the best business. Do not assume that things will work themselves […]

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Business Numbers – Friend Or Foe?

Mahmood Reza — Fri, 19 May 2023 09:15:33 +0000

Do you see your business numbers as a friend or foe? If you are in business, what is your attitude towards your numbers? Do you like them, dislike them, or is it somewhere in between? That is what we are going to cover in this blog. If you think that money is an icky subject, your business will remain a hobby instead of further developing and improving. Many business owners are good at what they do. They may have great skill and craftsmanship, they may excel in providing service to the customers, but they are not necessarily aware of the financial impact that affects their business. Numbers are your best friend Have you ever thought about who your best friend in business is? Spoiler alert, it is your business numbers. They are your best friend meaning they will not lie to you, nor let you down. Your numbers help you navigate your business through turbulent times as well as in times of prosperity. Sometimes, a poke in the eye may seem better than dealing with your business numbers. For some people, the flashbacks of Maths classes with Mr Calculate and Miss Take Away are far from being pleasant. Consequently, […]

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Why Planning Is Good For Business

Mahmood Reza — Mon, 17 Apr 2023 08:05:10 +0000

Planning is an essential process for any business, regardless of its size or industry. It involves setting objectives, developing strategies, and laying out the actions needed to achieve them. Remember if you want your business to be successful, you need to get to grips with it. Don’t think “Oh no!” and glaze your eyes over. You really do need to plan, so read on. Why plan for business? Planning relieves anxiety. In other words, it relieves all that not knowing what’s gonna happen the next day. You’ve got anticipation about the way your business is going to move forward and you do need to move forward. Because if you don’t plan, your business will be going backwards. Stress relief, making money, having the business that you deserve and want… These are the reasons why you should be thinking about planning. It’s not boring, it’s essential. Above all, it shows how you can turn your business into a reality. Write your business plan or it may be hard for you to survive and prosper. So, if you want your business to make money then start putting one together. Planning enables clear direction It provides a clear direction and it helps […]

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Business Resilience & Information

Mahmood Reza — Mon, 17 Apr 2023 07:56:11 +0000

Organisations that thrive and do well have the element of business resilience. Resilient companies are those that will be most likely to push through challenging or uncertain times. What is business resilience? Business resilience is what makes a company adapt to disruptions while at the same time being able to run its day-to-day ops. What we need to point out about business resilience is that it all begins with knowing which business processes have to be maintained so as to overcome the disruptions that come along. The most important elements of a business resilience plan of action are: Preparedness (identifying the potential risks) Mitigation (managing the risks) Recovery Why information is crucial for business resilience Above all, business resilience is about having and acting upon key information. When you’ve got information overload flying all over the place, it can get very convoluted and confusing. So, get access to key facts in the areas of the business that you’re concerned with. Get that information in real time. For example, in the world of business transactions, you need financial data. A lot of businesses, even those of a reasonably large size, will still be using outdated annual accounts processes and information […]

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