“It’s summertime and the livin’... ain’t easy. ”
While the reality of what summer will be for businesses and customers is hazy, you should use this ambiguous time to get ahead on planning and preparedness for the ever-changing landscape. Setting business goals is an important way to set yourself up for success.
As you wait for a clearer direction on reopening your business, we encourage you to keep forging ahead to solidify a strong strategy for summer.
How to start strategizing
- Understand your expenses and setting initial goals
- How much do you need to cover your expenses each month? Use that as your baseline metric and then consider a low, medium, and high scenario for revenue goals. You can also look at this as a customer acquisition strategy — how many new customers do you hope to gain to help hit goals?
- Plan for potential future loss
- If you’ve collected money for future services, assume a large part of that could and will be refunded. If you’ve applied for loans, make sure to plan to use those resources to cover any unplanned expenses. Plan to factor in a cash cushion to keep your finances in order.
- Explore new pricing models
- Knowing your goals and potential future loss will help you to strategize on new pricing options for summer and beyond. Start to put together a spreadsheet or put your pen to paper. Calculate a range of scenarios and see what you come up with. While pricing can vary by market, a good rule of thumb is to calculate your profit margins to understand your costs. Remember - customers will compare your business to others in your area. Make sure to do a competitor analysis to ensure you aren’t charging too much or too little.
- Involve your customers
- Survey your customers to see how they’re thinking through options for summer. Once you understand their intended behavior, make sure you’re meeting their needs as much as possible. Present them with your top ideas — this will keep the data limited and relevant to the programming you’re already thinking through.
Create your summer plan
If you’re ready to start planning for summer, we’re here to help! Start by using custom reports in Sawyer Tools to help you drill down information and identify purchasing trends.
- Understand last summer
- First, look at the total number of orders last summer — we suggest looking at the Orders Report specifically for orders placed in May 2019 - August 2019.
- Then look at the total revenue collected last year from May through August. You don’t need to know how much was allocated for summer camp and classes. You are just trying to get a sense of the total amount of money that typically flows into your business in these months.
- Determine historial order values
- Next take the total revenue amount collected and divide by the number of orders placed in May - August to get an average order value.
- For example, if you brought in $10,000 in revenue from 120 orders placed in May - August, you get $83.33 as the average order value. ($10,000 ÷ 120 = $83.33)
- You can also look at the current number of children registered for summer compared to your final number of enrollees last summer. This can help you make some projections and set goals for the number of enrollees that you will need to make the same or comparable amount of revenue for May - August.
- Set your new summer goals
- For example, if you had 350 individuals booked in summer activities last year with a total revenue of $70,000 for summer that means the average customer value was $200. ($70,000 ÷ 350 = $200)
- Projection Scenario 1: Assume you have less students booked but at the same customer value.
- Projection Scenario 2: Assume you have the same number of students booked with a lower customer value.
- Projection Scenario 3: Assume you have a higher number of students booked with a lower customer value.
- Lean on your community
- Be realistic about your goals and get buy-in from business advisors, trusted friends, and mentors whenever possible. Remember, community is everything and we are all in this together.
- Stay tuned for our next post on ways to thoughtfully involve your customers while exploring virtual options for summer and beyond.