Maximizing topline revenue is big, important and often messy. Just when you think you’ve got it under control you’re confronted with a new angle, new technology, new economic factors, world news, personnel issues—and amazing opportunities that require new thinking to generate lots of topline revenue.
The need for revenue is constant. You can guarantee more topline revenue by deeply understanding your revenue. Don’t rely on P&Ls and your CFO or CPA’s reports.
Analyze your P&Ls with Graphs
Graphs are powerful tools to gain insight in a way that the numbers on a P&L may blind you to. I use these four graphs with clients when we’re focusing deeply on maximizing topline revenue.
Use your revenue data for the past two years and the current year to date. The goal is to clearly see revenue segments and trends. When you’ve completed each of these graphs for each year, you will place them side by side to see the big picture. Then you’ll be ready to create a revenue-maximization plan.
Revenue by product line. Pie graphs are helpful to see the percentages of total revenue generated by each product or category of products. If you have product categories that encompass many small products, you should generate pie charts for individual categories. What is worth keeping and what has to go?
Revenue by date or season. Bar charts quickly show how your total revenue fluctuates by month or season. You may know instinctively that your business has seasonal fluctuations. The bar graph is a powerful motivator to reduce seasonal fluctuations over time. One client’s P&L showed him in dollars that revenue was low during the winter, but a bar graph really hit him with urgency by showing him in brilliant color exactly how much his revenue fluctuated by season.
Revenue by location. This could be as small as zip codes, or by county, state or region if you sell in a wider area. A pie chart works well for revenue by location. It helps you decide to keep, expand or contract your geographic markets.
Revenue trends. First, use a line graph to compare total revenue year over year, including year-to-date. What are the key differences? Or is everything the same from the first year to now? Line graphs show you the size of the difference from one year to the next. If there’s no space between your lines, you have clear evidence that revenue growth is nearly non-existent.
Second, use line graphs to get a deeper understanding of the contributions of your individual product lines. I often see a big bump up at the start of a new offering, then a slow, steady decline as that offering fades in importance. One of the hardest things for CEOs and Owners is to stop offering something they’ve offered for a long time or that they invested heavily in. A line graph makes that decision much easier.
When are you going to examine your revenue in graphs to see the nuances embedded in the numbers? And what will you do once you have that clear picture?
There’s no better way to learn absolutely everything there is to know about your business than by doing 30-day deep dives into each of these Focus Areas. I work with any business that is run by its Owner. Are you ready for a dramatic difference for your company starting NOW?