Last week I talked about the importance of regular reporting in your business - I would just like to expand on that this week.
As a small business owner you should know the key numbers of your business by heart. These key numbers provide valuable insight in your business and act as early warning indicators. Without them you may not realise that the business is heading for trouble and by the time you do it may be too late.
I can;t stress enough how important it is to spare some time from your normal work to spend at least 15 minutes daily and several hours weekly and monthly to go over the reports that show how your business is performing.
In this post I'll provide more details about these reports and what you should look for in them.
The reports should include key data along three components of your business – sales, expenses and customers. By taking care of key parameters within these three components your business should be able to perform well in good times and bad.
When analysing these reports, look for trends in the key parameters rather than looking at them in a vacuum. Typically, the trends should show comparison to the same reporting period from previous year (called Year over Year comparison) as well as comparison to the previous reporting period from the same year (called Sequential comparison). These two types of comparisons give you enough information to uncover positives as well negatives in your business and take appropriate actions.
In my view you should look at the reports for these periods – daily, weekly, monthly, annual. Below I have highlighted the key parameters you should look for in each of these periods.
- Daily
- sales,
- customer count
- and average order value.
- Weekly
- Monthly
- Total Cost of Goods
- Total Operating Cost
- Gross Profit
- Operating Profit
- Top 10 Customers.
- Annual
Hopefully you find this useful and you can start thinking about how you can improve the frequency and value of reporting in your business.
No comments:
Post a Comment