Welcome to the second story in our series, "Business Struggles and Solutions," where we explore the common challenges faced by small to medium-sized business owners and offer practical solutions through the lens of a fractional CFO advisor. Our goal is to provide insightful and relatable scenarios that demonstrate how you can overcome these challenges and streamline your business operations.
The Mystery of Sara's Revenue Spike
Sara's Best Revenue Month
Sara just had her best revenue month ever. She was ecstatic but also puzzled. I asked her how she managed to achieve such a remarkable month. Her response? "I have no idea."
I pressed further. "Surely, you must have some idea..."
"Nope - no idea," she reiterated.
It turned out that Sara and her team had sent a few promotional emails to their customer list, which resulted in about 15 past customers making repeat purchases this month. Without acquiring a lot of new customers, she managed to increase revenue by encouraging past customers to buy again.
The Problem
Here's the issue. Despite her excitement over the increased revenue, Sara had no idea what had caused it. More importantly, she had no clue how to sustain this success.
In a desperate attempt to replicate the great sales month, Sara decided she needed to take action. So, she thought she'd raise prices.
Unfortunately, because she didn't understand what was truly driving her success (retaining past customers), her strategy backfired. The higher prices resulted in fewer customers, and her revenue dropped.
Sara was thoroughly confused, frustrated, and angry... until she met us.
Our Solution: Understanding the Numbers
We explained to Sara that simply looking at the top-line 'revenue' number isn't an effective way to manage her business. Think about it—your accountant provides you with a P&L statement, and the first number you see is revenue.
If it's up, you're excited but unsure of what caused it. If it's down, you're depressed but equally clueless about the cause. This uncertainty is even more critical because you don't know what actions to take to improve revenue in the next month.
The Action Plan
We introduced Sara to our approach of understanding what's driving success in her business—and what's not. More importantly, we showed her exactly what needs to be done each month to achieve her goals. We call it a monthly 'Action Plan.'
Our Action Plan helped Sara identify the key drivers of her revenue increase and how to replicate that success consistently. By focusing on actionable insights and targeted strategies, Sara was able to stabilize and grow her business effectively.
If you're facing similar challenges and want to figure out a tailored Action Plan for your business, we're here to help. Schedule a call with us today, and let us guide you towards a clearer, more successful business future.
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