Profits Over Followers: Make sure you are measuring your business on what matters most
In our overwhelming world of social media, it’s so easy to get caught up in the numbers game of followers, likes and shares. Many businesses place a great deal of focus on follower counts and post interactions, aiming for higher numbers in these spaces as a measure of their business / product success.
Don’t be so busy growing your following that you forget you’re actually building a business though!
We have seen this so many times with new clients coming to us for strategic advice. You can so easily get caught up in chasing followers on social media platforms that you forget you actually need to be building a profitable business alongside that following. Your business won’t have much value if your have thousands of followers but don’t show a ROI (return on investment).
Growing your brand is such an important part of growing your business, but always make sure that the financial results make sense too.
- Understand your profit and loss report and know what is driving the results you are seeing each month.
- A standard, simple monthly review of the P&L will give you a clear understanding of where your business is positioned each month.
- Make sure your profit and loss report is showing all business expenses actually required to run your business.
- The most common items we see left out of the business P&L is a salary for the owner and rental where the business is being run from home / from a family-owned premises. Always remember that if ever you wanted to sell your business, the person buying it will want to earn some money from the business and they will need to run the business from somewhere too!
- The business needs to be profitable after these expenses in order to hold the value you may think it has. If you, as the owner, are not extracting some type of monetary value from your business, then it really is likely to be just a hobby or interest and probably not a sellable business model.
- Price your products or services correctly
- Ensure that the bottom-line result makes sense for your business model and stage of business.
- Your pricing structure should be low enough to be market related and result in sales, but also high enough to cover all expenses and result in a profit for your business.
- As an example: Selling out at every launch is great, but if this isn’t resulting in a profit then you may be priced too low.
- Monitor your balance sheet and ensure that the growth you are seeing on your social media platforms is resulting in growth of your business month-on-month and a return on investment (ROI)
- The balance sheet is a little more complex to understand but make sure you at least track your bank, debtors and creditors as a start. Join our mailing list to get the notification of this detailed post when it is published.
Always remember that having a large number of followers may look impressive at first glance, but what really matters is whether that presence translates into value for your business. A few loyal followers who support your business and refer you to others, really is worth so much in any industry!
It’s really not about how many people follow you, but how many find real value in what you offer.
Yours in simplifying finance,
