ASTA recently conducted a survey of 400 travel advisors in their network. The question was simple. How many of you will be profitable in the next 2 years? 72% 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!
Here’s the thing, 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 money. You’re crazy-excited about the commission checks coming in (which who isn’t when you’re putting all that work in) but aren’t thinking of your profitability. Changing that mindset is integral for maintaining your success and scaling your business.
Questioning when to invest in a Virtual Assistant or how much to financially devote to FAM’s, conferences, or trainings is meaningless until you’ve identified how much you need to make to hit your financial goal (aka your profitability). But I’m here to help! Below is a simple fill-in-the-blank “worksheet” that’ll ensure you’re setting the right sales goals, tracking your expenses and hitting that profitability goal.
How much money do I want to deposit into my personal bank account by the end of 2019?
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, monthly fees with TPI, chamber memberships, taxes, bookkeeper, 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 2019?
Think of all the tradeshows, conferences, FAM’s, Seminars at Sea you’re wanting to attend in 2019? 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!
Desiring 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 as the total as an example. If you’ve been focusing on cruises and find that your average commission is netting you $400 but you’re only selling 30 a year, you’re not going to make your goal.
Now’s the time to determine who and what you’re selling in 2019 to hit your goal. Set up monthly sales goals and check yourself often. Profitability is achievable, no matter your number. Now, go make BIG THINGS HAPPEN!