Your Quick Profitability Exercise to Ensure a Better 2020
How many of you will be profitable in the next two years?
ASTA asked this exact question to a group of 400+ travel advisors in a survey. 72% of respondents said they would be. However, when the remaining 28% left were asked why, most answered because they weren’t sure how to calculate profitability. YIKES!
It’s not uncommon for small business owners, no matter the industry, to have a tough time answering this question. The truth is, many of you started your business to earn a little extra income. It’s super exciting when the commission checks come rolling in (which who isn’t when you’re putting all that work in) but are you planning for your long-term profitability? Questioning when to invest in an assistant or how much to financially devote to conferences or trainings is meaningless until you’ve identified how much you need to make to hit your financial goal (aka your profitability).
Now that 2019 is coming to an end, it’s the perfect moment to identify the integral steps you need to take in order to have a profitable 2020. And I have the perfect solution. Below is a rather simple fill-in-the-blank “worksheet” that’ll ensure you’re setting the right sales goals, tracking your expenses and hitting that profitability goal. Set aside 10-15 minutes to really work through this. The 2020 you will thank you for doing this.
How much money do I want to deposit into my personal bank account by the end of 2020?
This isn’t sales, this is how much are you going to pay yourself, your NET. After all, this is about adding money to your personal bank account!
LINE 1: ___________________
What set expenses do I have?
Think internet, cell phone, rental space, association memberships, website, memberships, taxes, host agency fees etc.
LINE 2: ___________________
What are my other miscellaneous expenses?
Examples: Printer ink, paper, suitcases, thank you cards, etc.
LINE 3: __________________
Am I wanting to continue my education in 2020?
Think of all the tradeshows, conferences, FAM’s, Seminars at Sea you want to attend next year. How much will this cost?
LINE 4: __________________
Am I anticipating other business-related purchases?
New computer, printer, car wrap, marketing collateral, etc.
LINE 5: __________________
My help wish list!
Looking to add a virtual assistant, in-person help, or part-time bookkeeper? Set a budget right now.
LINE 6: __________________
Now, add lines 1- 6
This represents how much you need to make in commission, service fees, plan-to-go fees, etc.
What does that number look like? Let’s use $75,000 total as an example. If you’re only booking 30 cruises a year and your average commission is netting you $400, you’re not going to accomplish your goal.
Right now is the perfect time to determine who and what you’re selling in 2020 in order to hit your numbers. Set up monthly sales goals and check yourself often. Profitability is achievable, no matter your number. Now, go make BIG THINGS HAPPEN!