Your Year End Review
Nowadays, most businesses are looking to cut costs. Some are cutting budgets even though they are having a good year financially. It is a good idea now that the season is over to analyze where your hard-earned dollars are going to see if there are any unnecessary expenses or cash drains that can be eliminated. We take a few days after all the dust has settled to look at all of our data and to explore ways to be more effective and productive. Here are some key things to look at:
- How much money came in and how can you increase your profits? This one is simple enough, but I am still surprised by how many businesses do not look at these numbers and compare them to previous years. Depending whether you are up or down you can start to review and explore the reasons why.
Are you down because you deleted a popular class or time? If you are up, try to figure out why as well. You need to know if there’s a day and time that is a goldmine.
Are your total numbers down? It is easy to blame a down turn in numbers to the economy, but it may be something wrong in your business that you need to fix. I don’t like to blame anything on outside forces like economy, competitors, etc. The reality is that for the most part we have control over our business success.
Now is the time to work on the why and to discover the reasons behind any shortcomings you may be experiencing. You might want to reach out to past students to see why they left and what you can do about getting them back in September.
Now we look at obvious ways to increase profits.
It may be time to increase your fees. We’ve done it for the upcoming season and so far, we have had a great priority registration for our current clients and to my knowledge no one has mentioned the increase. Here is the reality: everything goes up! Your rent, insurance, taxes, utilities, teacher and staff pay. So should your fees. Most people will not even notice a $50 to $60 increase in your rates. Over a 9-month period, a $60 increase is only a $6.66 per month increase. Make sure you point that out if anyone questions your rates. I wish all my bills only went up by that much.
The key here is does your bottom line work for you? If not, you need either more students or an increase in your fees or you will struggle to make ends meet. The reality is that it is easier to get people already doing business with you to spend more than it is to get new people in. It is less expensive to do as well. That is why it is so important to look at the numbers and see if they work. If you are concerned about a fee increase and that you may lose people I recommend that you find out what your competitors are charging. I would be willing to bet that if you go up in your rates, they will too! Being the least expensive is never a good idea. Just make sure to give to high-end lessons and service.
- What worked and what didn’t work? This is very important to write down and really think about:
What has taken place over the course of the season? If you have taken a survey, all the better as now you will have gained greater knowledge as to what the customers perspective is. It always amazes me at how different the customer’s perspective is to my viewpoint. There are times when we get feedback and we think to ourselves, how in the world they could have misconstrued what was either written or said? And yet it happens more than we would like. But this exercise isn’t just about uncovering the negatives, look at all the wonderful things you have done that worked well. Can you duplicate them more often? Is there a way you can implement a successful idea every week or month? Some of the most talked about things that take place at our school have nothing to do with dance lessons. Write everything down so you can remember it and see how you can replicate the good.
- Don’t cut back on your advertising budget. When there is a downturn in the economy, one of the first places businesses look to cut is in their marketing budget. BIG mistake! Now is the time to be more creative with your marketing dollars and to increase your marketing budget if you can. Considering that some of your competitors may be cutting back, it will be a great way for you to have a real edge in the new dance customers market. We have many article on Underground Marketing to discover ways to advertise on a budget on DanceTeacherWeb.com. However, know this, the lower-cost the advertising expense, the more legwork you’ll need to do. But it will be worth it come the new season. I’m always asked what works best, and in my opinion it is to do as much as you can. Direct mailings to a list of probable customers in your demographic, flyers, newspapers, magazines, local TV commercials and anything else that you can think of. The less money you must spend, the more outside the box you must think. The key here is just don’t sit there and lament, Oh I can’t afford it. Start being creative!
- Who do you want to stay and who has got to go? OK, the last thing we like to do is turn away paying customers, but if someone is a pain in the neck, it may be time to send them on their way. I have coached some studio owners who have had their season spoiled by one or two bad apples. Saying goodbye will be the best thing for your business and for yourself. We have sent a few students packing and even though some were very talented and some paid well, it was like someone taking the weight of the world off Atlas shoulders! I would always encourage you to try to fix any situation that can be resolved, but some people are just not worth the time and effort and you will be much better off without them in your school. The same holds true for staff and faculty. This is hard especially if you have developed relationships with these individuals. But here are the cold, hard facts: If someone is not good for your business, it is time to get rid of them. We have had to make some very hard decisions over the years and in retrospect, concerning the people that we had to part ways with, our only regret is that we didn’t do it sooner! If you have tried to get someone on board with your overall philosophy and they are bucking you, they are probably never going to come around. Change is always a bit scary and the uncertainty has kept many employees around longer than they deserved to be employed. But once you make the decision to move in another direction, you will be glad you did so.
Next month, we will look at more ways to uncover what may be lacking in your business and how you can develop systems to keep track of results all year long. The time to build for the next season is now. Discovering what went well and what didn’t is as simple as laid out above. The truth is, you may find things that surprise you. Think of it as the annual checkup for your business. It may be that your business needs just a little fine-tuning or adjustment to get to the next level.
Here’s to a Great Year Ahead!