Some numbers…He, she it…

Some numbers…For all of us

In financial planning there’s something called the rule of 72. It refers to the approximate number of years required for an amount of money to double at any given interest rate. For a six percent return divide 6 into 72 and you get 12, (the number of years required to double a balance at 6%).

There’s also the rule of 78. It derives its name from the fact that adding the numbers of the months in the year totals 78. That rule is typically used in lending (like car loans) to calculate the portion of each monthly payment that goes toward the principal versus interest in each month.

But for us the rule of 78 can be used to calculate the monthly sales required to achieve a given year end total. Assuming we want to budget new sales of $78,000 for the year, per the rule of 78 we’d have to add one new customer in January who orders $1,000 every month. Then in February another one, in March one more, continuing monthly through December with each one buying $1,000 per month. That year’s sales to those twelve new customers would total $78,000.

To use it for any annual target just calculate the percentage your goal is of $78,000. Example: if you’re targeting $50,000 in new sales, that’s 64% of $78,000. Therefore the monthly number to achieve $50,000 is 64% of $1,000 or $640 in new repeating sales each month.

Obviously, customers don’t come in fixed sizes and don’t order exactly every month. But if we ballpark that average monthly value by looking at our current customer crop, we can get pretty close to what we’ll need to hit a new business target.

He, she it…Or just names?

Despite today’s Woke pronoun fixation, there’s another side to this topic. It’s the undifferentiated or just unclear use of pronouns in our written and verbal communications. Take this example: “Joe told Mark to drop off a pail of detergent. Then he went to the next call” So, did Joe or Mark go to that next call? With this sentence structure it could have been either of them!

It really takes only a small effort to use a name versus the “he, she or it” handle. The benefit of that clearer communication has two good outcomes: It saves us both the time and the frustration of having to ask for a clarification!

Aside from lessening frustration, the ability to better communicate our thoughts will improve just about every aspect of our work lives. Better clarity might mean that machine operator actually understands the reason for better prescrapping or regularly changing the wash tank water.

Oh, and taking our workday out of the picture, clearer communication at home might just result in some benefits there as well.