View this email in your browser

May 2023 Edition

Hello Business Owners!

May and June bring us the chance to plant new seeds, both in the ground and in our businesses. Just like a skilled gardener, we start by picking the best seeds and creating a fertile soil. Then, we roll up our sleeves, get our hands dirty, and carefully plant those seeds, knowing that it takes time and care for them to grow into beautiful flowers.

But here's the thing: your business works the same way. While you're hustling and working hard every day, it's crucial to set aside some time to plant new seeds of opportunity.

Take a moment in the upcoming weeks to explore fresh ideas, try out new strategies, and nurture them. You never know which of these seeds will bloom into something amazing for your business. Happy planting! 🌷

FROM THINK TEAM

📈 What is Contribution Margin? And Why Is It Important To Understand This Number In Your Business?

• In this blog post, we discussed the concept of Contribution Margin.

• Contribution Margin is the profit that’s left over to cover fixed costs after deducting the variable costs from your Sales.

• Contribution Margin = Revenue – Variable Costs

• For e.g. if an e-commerce business sells a pair of shoes for $80, and the variable costs for manufacturing, packaging, and shipping that pair of shoes amount to $40. The contribution margin would be $80 - $40 = $40.

• Why is this important to understand? Here are some reasons:

  • Helps you make better pricing decisions and play around with discounts.

  • Helps you understand your profitability by product.

  • In lean times (like we are in now), it can help drive cost control.

  • Helps you with break-even analysis and set sales targets.

  • Overall, it helps you with decision making in your business.

• Remember, the higher the contribution margin ratio, the greater the portion of each sales dollar that contributes to the company’s profitability

🛍️ Canadian eCommerce Trends in 2023

• Revenue in the eCommerce market is projected to reach $78.6bn in 2023.

• This isn't a one-time thing either. We're expecting to see some steady growth over the next few years, with the market volume potentially hitting $116bn by 2027.

• The average revenue per user (ARPU) is expected to amount to $2.65k.

• Ecommerce won't replace in-person retail: Even though online shopping has been a lifesaver during the pandemic, it's not about to put physical stores out of business. It turns out people still love going to stores and browsing the aisles!

• Slower growth of retail ecommerce: While online shopping is still growing, it's not quite as turbo-charged as it was in 2020. Expect it to keep growing, just not as fast.

• Ecommerce Shake-Up: Retailers are going to have to step up their game to stay competitive. That could mean personalized packaging, making their websites mobile-friendly, and even accepting Bitcoin.

• Online shopping is here to stay: Even though we're seeing a bit of a dip in online shopping, it's definitely not going anywhere. With more and more retailers beefing up their online presence, ecommerce is going to be a big player in the retail world for years to come​.

* Source

FROM THE WEB

🌎 Top 5 picks from around the web:

• What your brain looks like after a 20-minute walk (Link) — Get outside!

• Congrats to our client - Mercator AI - on raising US$3.75M! (Link)

• 9 AI tools to grow your eCommerce business. (Link)

• Understanding the CPP death benefit. (Link)

• How to Get Rich (without getting lucky) - Naval Ravikant. (Link)

• Bonus - This AI Robot gave an interview on 60 Minutes Australia. (Link)

BOOK NOTES

1. Define Your Critical Systems: Start by outlining the critical systems your business needs to generate revenue. Identify your target clients and main products, then map out your Critical Client Flow.

2. Assign Responsibilities: List your business's key departments and assign parts of your Critical Client Flow to each one. Identify Department Heads and Knowledgeable Workers who have the crucial expertise for each task.

3. Extract Knowledge: Capture the knowledge from your team and convert it into a shareable, replicable system.

4. Organize Your Systems: Use systems management software (SMS) and project management software (PMS) to help your team find the information they need and stay accountable.

5. Identify a Systems Champion: Find a manager who is a systems champion with strong attention to detail and organization.

6. Scale Your Business: Continue extracting and organizing systems until you're able to scale up or seize new opportunities. Work consistently to free up your best talent to focus on high payoff activities.

7. Address Fundamental Questions: Regularly ask yourself questions such as:

   1. Are your business operations 100% reliant on your (the owner’s) personal involvement?

   2. Do you have leaders in each department who are capable of designing and implementing business systems?

   3. Are your employees following the designed systems for a specific department/task?

Do you have a book recommendation for next month? Let us know!

QUOTE OF THE MONTH

Subscribe

Copyright (C) " target="_blank">unsubscribe