Managing your sales pipeline of new work ~ free tool
How do you gain an overview of the forward pipeline of work for your business and therefore work out what the priorities are for winning new work vs. research & development vs. admin vs. time for a holiday?
We’re fans of online CRM systems such as Tactile but if you’d rather there is a more manual way of doing things.
First of all you need a long list of all the possible clients for each of your products and services. Depending on how long this list is (i.e. 10’s vs 100’s) you might want to prioritise them according to how easy you think it would be for you to sell to them and the volume or scale of work they might buy/commission.
It is a good idea to do some homework on each of these to see what they already buy that overlaps with what you offer … so if they’ve just placed a large order with someone else or recently signed a contract with a competing agency then they’ll probably end up lower down your priority list.
Once you have a shortlist of priorities it is mostly about being clear as to what you’d like them to buy and tracking the stages of conversation you’re having with them. Here is a client status and planning tool that you might find useful. See the yellow notes for our thoughts on how to fill in each column. You might also want to add a column where you record your thoughts on the chances of winning the work (one way to show this is the % chance of the project/sale happening).
On the second sheet in the tool you’ll find a layout for you to use to track the phone calls and emails you make to each potential client. This means that not only can you track your activities but if others in the firm speak to them you can track this too.
You might also like to consider how long the list of possible sales needs to be in order for you to win enough to stay at the same level of business revenue vs grow the company? If you track all your leads over time you’ll be able to spot what percentage you tend to win … and therefore how many new leads you need in order to win enough work. In the service based creative sectors this is probably somewhere between 15-25% of all early stage conversations … just as a very very rough guide. If you’ve been receiving a lot of press coverage for your work of course this percentage will probably increase but you might not want to build in a higher win rate as necessary to fund the costs of the business!
Inspiration for the weekend ~ Walk with Giants
Walk with Giants is a series of audio walks on the Johnnie Walker website. You can hear Richard Branson, Ranulph Fiennes, Ozwald Boateng, John Hegarty, Lewis Hamilton & Amyr Klink talk as they walk, retracing their journey through life.
Worth downloading and listening to as you stroll around the same locations ~ especially:
John Hegarty recaps his advertising career as he strides around Soho. How he was young and angry, the connection between fear and inspiration, what his advertising philosophy is and what he learned about business from playing tennis.
Ozwald Boateng walks along Savile Row covering his learning experiences and design values, surviving closure and inspirational clients.
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Enjoy the weekend and let us know where you favourite places are to think… post a comment below
creative reservoir event
Kingston Entrepreneurs Society is hosting an evening for creative enterprises on Wednesday 17th February.
The Creative Reservoir will set out how to make the most out of your business by using your (or someone else’s) creativity (or conversely how to make the most of your creativity by using business skills).
Discover the basics of finance management for your creative business and learn the importance of combining knowledge from the creative industries with entrepreneurial and business skills. Plus get your chance to put your questions about working in the Creative Industry to Katy Cowan, Editor of Creative Boom Magazine.
How to read your benchmark – a guide
This post is a how to guide for all those MyCake users who’ve been receiving ‘your data has been approved’ messages and are wondering how to look at the benchmark for the quarter or year concerned.
What’s in the benchmark report?
Benchmarking allows you to compare your financial information anonymously and confidentially to the rest of the MyCake user base. For example you can compare how your ratios of gross profit (sales minus cost of goods), net profit (sales minus cost of goods and minus indirect costs) compare for that quarter or year to the average, best, worst and top 25% of all other users.
You can use a benchmark to gauge how successful you’ve been relative to other businesses like yours (in terms of sector or age of business).
If you click on the ‘results’ button at the top of the MyCake dashboard you’ll see this screen…
From here you can pick the set of benchmark results you’d like to see. There’s plenty to look at in the 2008 annual data set so we’d suggest you start here. As you’re probably all too aware cash flow can make a quarterly P&L look pretty variable whereas the annual view is usually a bit more even.
So pick the period from the drop down and then click on either of the two grey buttons at the bottom. We’ll now look at the reports as they appear in the menu list at the top, starting with the graphical results in slice 1 first…
Slice 1 – the overview
In this view we’re showing you some basic metrics – gross profit, indirect costs, net profit etc. The thermometers are set to show green for generally healthy levels, yellow for things that probably need a closer look and red for things you should definitely investigate further.
To see your figures use the blue vertical scroll on the left, and at the bottom of the list you’ll find your own data set. Along the way you’ll see that you can also look at the average, maximum and minimum for the whole MyCake user set as well as a smaller section of users based on the ‘group’ you joined when you signed up. So if you’re affiliated with partners such as Artquest or Cockpit Arts you can compare yourself to just this crowd.
For those of you who enjoy a few columns of numbers in the mix we also show you these basic metrics in figures - again with the same ability to select different things to compare yourself to in the drop downs.
Slice 2 – The detail
There’s only so much we can show visually and at some point we need to revert to columns of figures! This section shows how your figures compare as a full profit and loss sheet. We show all the costs as a percentage of turnover so that we can give you comparisons across businesses of different sizes and scales yet still compare apples to apples.
As a place to start why not compare your split between main income stream and ‘other income’ against the average for the whole MyCake user base.
Next you could look at what proportion of your turnover you spend on what’s called ‘direct costs’ – this means the amount spent on production materials and any freelancers/sub-contractors who work on the production of goods and services. If, when you look at this you think that you would like to re-allocate some of your cost headings, do talk to Marion (see support) who will be happy to help you through this.
We’d expect that those who sell their time will have quite low direct costs (unless there are a lot of freelancers involved) whereas those who make objects will have a higher direct cost base (but it still doesn’t want to exceed 40% of turnover absolute max).
Next you might go on to look at where your major indirect costs are … where is the highest percentage of your turnover spent? Travel, professional fees, rent etc?
Again see how this compares to the norms.
Towards the bottom of the page you’ll see the net profit line as well as the drawings and pension lines. Go on! We dare you!
Slice 3 – What if?
By this point we hope you’re starting to ask questions about what you could do differently going forward both in terms of income growth and changing expenditure. The third view enables you to play with your data a little and ask ‘what if’ questions.
You’ll find that on this page your figures have been turned into a flow diagram with income and direct costs on the left, through to profit on the right. The dial on the left allows you to see what happens when you increase sales. The dial on the right shows you to see the impact of increasing your drawings. The sliders in the middle allow you to play with scenarios where you increase or decrease major costs such as marketing, staffing etc. Don’t forget to pick your data set from the drop down list in the top left!
So you could consider what would happen if you increased your marketing spend by 10% and then looked at how much you’d need to increase your income for it to have been worth it (by worth it we mean more net profit at the end). You might consider what would happen if you moved into larger premises and therefore had to increase the amount you spend on rent.
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There are plenty of possibilities and if you’re wanting more guiadance, then do book a 1:1 session with MyCake and we’ll help you interpret the information.
We’ll also keep posting on the blog about what we’re seeing in the overall results and you can compare this to your own data set.
Tweeting for sales
Can Twitter really help you sell? Here are a couple of posts that help to explain how…
Twitter expert, Mark Shaw, has written a post for Enterprise Nation focusing on how Twitter can help you find new customers.
Duane Jackson of KashFlow has written a useful post on how Twitter can help you close sales.
and don’t forget to follow MyCake on twitter… http://twitter.com/MyCakeFinance
Contemporary Art Society Curatorial Fellowships
Are you a curator looking to extend your skills? The Contemporary Art Society is funding three Curatorial Fellowships as part of its Centenary Programme. The posts are between 6 and 12 months and are based at:
- Contemporary Art Society
- Nottingham Castle Museum & Art Gallery
- Herbert Art Gallery and Museum, Coventry
Applications are due by 8th Feb for first two, and by today for the Herbert Art Gallery. Click here for more details.
What’s the difference between your ideal rate and the minimum you’ll accept?
In the last post on the subject of how you price time, we looked at what your ideal daily rate would be.
In this post we’ll look at how you might actually offer a range of rates (you might not publish this but you might negotiate it) depending on what the work is and how busy you are. We’ll also look at how you move this range upwards over a period of years.
Using the same example as before, where you want to:
- to charge £750 per day
- to sell 100 days of time in a year
- therefore to turn over £75,000
- assuming £25,000 of costs achieve a taxable income of some £50,000
In reality you may not be able to charge this top rate for every job. There are a number of reasons for this:
- the market rate for your skills and your level of experience may not be as high as this so if you charged it you’d price yourself out of the market
- you may take on work for which you are over-qualified, particularly if you’re not as busy as you’d like to be and need the income … but you may therefore not be able to charge top rate for the work
- you may choose to over-deliver. .. spending more days on a project than actually budgeted for
- you may have some clients whose budgets are simply smaller, yet they offer exciting work so you drop your rate in order for them to be able to afford you (in these cases the work had better be exciting!).
In practice you may well need to have a range of daily rates, and the rate you quote to the client depends on what the work is, what sector they are in, how much you need to the income etc.
So if £750 is at the top of your range what is at the bottom? Only you can answer this – what fee is so low that you’d rather spend that day having a lie-in or a holiday?
For the purposes of this post let’s say that the minimum rate you’ll accept is £250/day.
Now your range is from £250-750 per day.
How can you move this range upwards over time?
Well for a start always quote your top rate when you’re busy. If you’re not really earning enough consider what projects you might take on at lower rates … one of the keys here is not to burn your bridges with cheaper clients when you’re busy and to be humble enough to go asking for work when you need it 
Over the years move the range upwards so that both your top and bottom rates go up! This may require you to drop some of your least well paid work and perhaps the clients that offer it simply because they may not be prepared to pay more for that work and may prefer to hire someone else without changing the rate. Such is the price of success!
V&A Decode
Bloodline 2 by Christian Kerrigan
MyCake is currently loving V&A’s Decode: Digital Design Sensations and its first Digital Artist in Residence, Christian Kerrigan. Christian is creating new works or ‘middle stories’ to add to The 200 Year Continuum. Check out the blog here.
If you wish to indulge your inner geek or design urge, there are a number of parallel events throughout February, ending with the SAP Weekend: Digital Design Festival.
How much time can you sell?
This post is aimed at those businesses who essentially sell their time (and the time of others) and looks at what assumptions you can make about how much time you can realistically sell per annum.
Q1 – What would you like to earn per annum?
Let’s start with the simple version i.e. a freelancer or sole trader. The more precise question is what taxable income would you like to earn? The answer to this question is different from ‘what turnover are you aiming for?’
To demonstrate:
If you’d like to have a taxable income of say £50,000. This is after the costs of running the business have been taken into account. And these business costs come to £25,000 (travel, rent etc). Then, in order for your taxable income to be £50k you need to turnover £75k.
Q2 – How many chargeable days are there in the year?
The answer to this question is crucial as it will determine the daily rate you aim to charge. If you’re already in business then look back at a few months and see how many full days in each week are chargeable times … see if you can get to an average.
We reckon that the conservative answer is 2 days per week. We’d rather be conservative than optimistic on this figure because if you go for the optimistic end of the spectrum e.g. 4-5 days/week but never achieve it then you’ll find yourself needing to sell a lot of days of time just to achieve a basic level of income … a headless chicken comes to mind.
So, on two days a week that’s roughly 100 days per year.
Q3 – so what daily rate am I aiming to charge?
Well, divide your goal income (£75k) by the number of chargeable days (100) … to get £750/day.
Another way of looking at the daily rate you charge now e.g. £250 is to say how many days do I need to charge in order to achieve my goal of a taxable income of £50k … in this case 300 days … nearly 6 days per week … not likely!
You could also consider what your turnover will be if you sell 100 days at this lower rate – £25k. Once you’ve taken the cost of running the business into consideration there won’t be much left to pay you with.
Can you now see why there is little virtue in being cheap and a definite need to manage how much free or cheap time you give away? (and by the way there will probably always be a need to give away some time as you invest in new working relationships or do early work on new unpaid ideas/projects/products).
In the next post on this topic we’ll look at how you compare this rate to the market rate (i.e. what customers expect to pay), and how over time you can raise your rates as you get busier.
Cloudbusting with MyCake
Is ‘Cloud Computing’ as puzzling to you as Kate Bush’s lyrics in Cloudbusting? The good news is that if you’re using MyCake you’re already experiencing cloud computing.
And if you want to understand more, Bristol based Dan Hancock, of IT support company Spider Group, has written a handy overview:
What is ‘Cloud Computing’ and how can it benefit my business?
What is ‘the cloud’?
Cloud computing is a recently coined but popular term for the delivery of information and services to one’s computer, over the internet (or ‘cloud’). Why ‘cloud’? Well, if you’ve ever had the pleasure of reviewing network diagrams you’d know that the internet is generally depicted by a cloud. My guess is that the Internet has become such a vast, unfathomable network of information and services that no one can really explain it – so we just call it ‘the cloud’ and take for granted all the really clever, interesting and weird stuff that happens in there.
Personally I’m not sure that l like the term, I run a business and the image of my information floating around in some vast cloud makes me a little uneasy, fortunately I know better and if it’s the term that’s going to stick then I need to join the party… Whether it will stick is another matter, the most recent fad was calling it web 2.0 and the slightly less catchy software as a service (or SaaS), not to mention on demand services and application service provision (ASP). But all these terms essentially refer to same thing; the delivery of services and information over the internet to billions of consumers and millions of businesses all over the world.
Give me an example…
To take a practical example of cloud computing, we’ll look at small business accounting software as this should apply to the broadest audience.
Standard Computing: Sage Line 50 is by far the most popular accounting solution for small businesses in the UK and those of you who have used this software will know that, like all standard software, it needs to be installed and maintained on a computer in your office. This can cause a number of headaches for business owners and financial controllers such as; accessing accounts information when you’re not in the office, working across multiple locations or from home, upgrading software and hardware and backing up your data.
Cloud Computing: QuickBooks Online is an American accountancy package that has been re-developed in a web-technology that allows it to be delivered as an online service. This means that it can be accessed via any web browser, all you have to do is go to the home page, enter your security information and start using it. You can print, export and report on information just as you would with standard software but you have the added convenience of paying for the service on a monthly subscription, with no up-front capital expenditure. I believe that QuickBooks Online is currently only available in the US but other online accounting packages such as KashFlow are available to the UK market, I should state that I am only highlighting the Cloud Computing concept and not the quality of the accountancy packages themselves!
And the benefits are?…
So with the example of your financial systems, lets look at some of the benefits Cloud Computing can deliver to your business:
Work from the office, home of on the road: With cloud computing you’re not limited to working from any one computer, you can access the software from any laptop or PC, anywhere you can get an internet connection, which is great for productivity when you’re on the road or for flexible working for your workforce.
Share real-time information with colleagues and clients: Almost all web-based applications provide role-based access to information and reports which means you can collaborate with colleagues in different locations and provide better service to your customers.
No hassle with software and hardware: You don’t have any hardware in-house, so you don’t have the hassle or worry about servers failing or hardware upgrades, you don’t even technically have any software so no more painstaking installations or desktop troubleshooting.
Lower cost of ownership and no up-front capital expenditure: I’ve been through the process many times, ask for a quote for a software package, get a quote for the software, software support, additional licensing, a server, backup equipment, hardware support, delivery and 3 or 4 day’s labour to put it all together. Before you know it you’ve spent over £10k up front and 1k per month for the rest of your business life for something you’re probably going to have to upgrade in 3 years time.
Securely backed up data: Most data on the web is backed up at least daily and i know for our database applications you’re looking at an hourly backup cycle so your business information is safe in separate geographical locations at all times. Software providers that host in the cloud can afford much more advanced firewall and security systems than most small or medium sized businesses and only the best technical teams to manage them, your systems are probably in better hands with them than in your own offices.
So is Cloud Computing the way to go?…
I would be so bold as to say that every business could benefit from a little bit of cloud computing but at the moment I see it suiting small businesses (1-50 staff) who are flexible and forward thinking multi-locational large businesses (100+ staff) who can afford to think outside the box. The in-between Medium size businesses tend to have invested heavily in skilled personnel and equipment and only have 1 or 2 locations – besides, what would all their expensive staff be doing if not managing VPN connections, monitoring hardware and applying software updates?…
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