Going Solo 23. Action Plan Key Initiatives

I wrote last week about my review process and how it related to Nero’s Notes.

I’m working on identifying the key initiatives that we will implement this year to improve performance.

Top 3

1. Newsletter. In 2019, we sent far fewer e-mails to customers. To me, they felt toxic. Facebook and Google were being creepy, the GDPR had come in and Mailchimp and Shopify had fallen out. I think that it’s time to reinstate some communication. The exact nature of it, I’m not sure yet, but the focus will be on delivering value to subscribers without harvesting data.
2. Prioritise Content. Nero’s Notes is, at its core, about using and enjoying analogue tools. We curate analogue experiences. Amanda, Scrib and I write not just about new products, but about why and how we use them. I am keen to bring this more to the fore.
3. Affiliates. We have had some success with Affiliate marketing in 2019. I would like to build on that. Logistics are challenging, in terms of getting the right levels of stock in at the right time.

That’s it. Those are the three key initiatives.

Of course, there are all the usual challenges of running a business. Supply chain, cost control, pricing and margin and so on. We hope to get better at all of those too.

Funding

As indicated last week, the objective is to nudge the company into being cash generative this year. This will influence how I implement the three initiatives.

For example, the newsletter. One possibility is to outsource the production. There are people out there who specialise in newsletters and product promotions. I suspect they are pretty good at it too. However, there’s a cost. A cost that will slow return on investment. I also believe that part of our success is our tone, which is genuine and personal. Inevitably, that risks being diluted if someone else starts communicating on our behalf.

The same is true of content. It is tempting to identify a third party to implement a new theme on the Shopify platform and change how the site looks and behaves. Experience tells me that the cost of this would be significant and a certainty, where the return would be a variable and speculative. It turns out, that designing a web store with many products and variants is difficult.

I will focus on coordinating content and social media, making it easier for people to discover the excellent pieces that Amanda and Scrib contribute.

Affiliates should be simple. Plenty of people write nice things about us already. This is a way to measure that and reward the writer.

Budget

Next week – how I estimate the impact of the actions on the business, and decide how much investment I will make in each.

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Going Solo 22. Nero’s Notes Review

Nero’s Notes Review

Neros Notes is a trading style of Loggedoff Ltd. The company began trading in February 2017. To date, I have taken no salary and the company has lost money each year. Ballpark figures, the company lost 40k in Year one, 11k in Year 2 and looks like maybe a 5k loss in the year to end in January 2020.

Not exactly Apple or Amazon, is it?

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Going Solo. 7. Make a Plan

Make a plan. I imagine that if you have followed these posts, then you have pretty much done this already. Certainly, you have dealt with most of the questions that need to be considered. What I really mean, is “document a plan.”

Why

“Write your why” is taken entirely from Simon Sinek’s excellent book “Start with Why”, which I heartily recommend. Whatever it is that you are doing, have a think about why you are doing it. This should provide some pointers to how you are going to define success. Why I have a consultancy business is very different from why I have a stationery business.

Budget

I come from a financial services background, so I’m big on budgets. I won’t bury you in detail, however, there is an important element to this process. The first sheet  is “Assumptions”. Here, I spell out how I arrive at a number. For example –

Assumptions

For example, if I expect 10 transactions in January, going up by 1 per month, I will type in 10,11,12,13 etc into cells. Beneath that row, I will note my logic.

Then, these cells formula copy across to sheet 2, which is where all the numbers sit.

This allows me to change assumptions, and those changes automatically update my budget sheets. This is a kind of sensitivity analysis on the fly. What happens if I double the transaction volume? If I change the assumptions sheet, everything updates. This is how I make a plan.

Revenue

Sheet 2 is made up of monthly columns, totalled to a year. The top few rows are about revenue. I break these down as far as I can. For example, in the stationery business, row 1 is number of transactions, row 2 is average transaction value. (All fed from the assumptions sheet.) Row 3 is row 1 multiplied by row 2. That way, I can easily see whether I am not doing enough transactions, or that those transactions are not big enough. The key to budgeting revenue is to be conservative. Dreaming is fine, but not in the budget.

Costs

There are many ways to define different types of cost. I keep things simple. I have costs that vary according to sales, payment fees for example. Then I have a separate section for ‘fixed’ costs. Office rent, cell phone contract etc. Here, I tend to be as realistic as I can, but if in doubt, round up.

Contribution

Contribution is revenue minus cost. An important number. Ultimately, this exercise serves to show you what sort of revenue line you need to make this work. Tweak away. What if you could pick up an extra transaction a week? What difference would it make to the bottom line? How about if you put off getting an office for six months?

With a little work, you should arrive at a budget that looks both doable and worthwhile.

To be honest, the reality will probably be vastly different – but that doesn’t matter. The important things are:

  1. Sales number. You are delivering this. Be certain that it is doable. Then do it.
  2. Costs. These are not targets – but maximums. Do not overspend.

Keeping Score

Subsequently, each month you should compare your numbers against your budget – how to do that is for another post.

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