By Cruz at September 16 2019 10:56:47
But your fixed expenses don't do this. They remain the same no matter what sales does. That's why it's call fixed. These are expenses like rent, taxes, utilities, phone, salaries, insurance, etc. A lot of business owners never consider this. They just lump all their expenses together. But you could never make an accurate plan if you combine all your expenses together. If you project your sales higher and want to know what your expenses will be, you have to separate your fixed and variable.
Now let's say you estimate your conversation rate to be 3% of turning leads into paying customers with the advertising method you're going to use, how many leads would need to contact to get 387 customers? Simply divide 387 by 3% and you get 12꽭 leads you're going to need to contact. Then the question is; is your market going to be big enough to provide you with 12꽭 leads for the next year and how many will you need each of the following years?