This week has been about getting your finances in check for 2021
We started off with our guest interview with Debbie, where she talked all about how you can be financially successful in 2021 and shared her book-keeping and accountancy skils
Tuesday, I shared 3 tips that make a big difference to our gym to maxmise our profit
Yesterday, we shared what's working for us right now in terms of saving for Tax and VAT
Today, I want to go into a fundamental thing you need to know asap in your business, so the amount you're spending on bringing a client in is working just as it should 💸
Today I want to talk about your client lifetime value
This means how long you can keep a client and how much they're worth over that time
Say you charge £100 a month
The first month, maybe you're paying £100 in advertising, staff costs etc
So you break even
But then you might think, it was pointless signing that client up
And this is where you need to learn your clients Life Time Value (LTV)😎
If a business keeps a client for 6 months for example
Each client is worth £600
So say they cost £100 to sign up..as a whole they're worth £500 to you
So consider the LTV of your clients
If you only keep a client for 2 months and it takes £100 to sign them up
You've only made £100 profit 😞
Figure out how long you can keep them, how much they're worth, and how much you're willing to spend to get them in, in the first place
If you've been doing this a while, you should have a good idea of how long your clients stay with you
If you're new, keep it simple, aim for 6 months
It should be longer if you're good at what you do! 😝
I hope this helps!
David :)
