Posts Tagged ‘sales’

Analyzing Expenses

When you examine your company’s income statement do you find yourself wondering why some expenses seem to have little to do with sales? There are three basic breakdowns of expenses that will help you when analyzing expenses. Read the rest of this entry »

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Who is My Customer?

When I look at some businesses I sometimes think they have never considered the basic question, “who is my customer?”

My Customer is Everybody!

Some businesses think everybody is their customer, but the truth is not even Walmart can say that. Some people simply will not shop there. But, let’s get back to your small business. You are Read the rest of this entry »

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When a Loss is a Win

The statement when a loss is a win sounds contradictory, but perhaps losses are not always what we think.

Customer Relations

Recently I purchased a home improvement product that I needed to install. When I tried to install it there appeared to be something wrong with it, so I returned it for another of the same model. I also could not get that one to install properly. As a result, I returned it and got another brand that worked perfectly and was easy to install. Now, it could well be that Read the rest of this entry »

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Two Sales Measurements

Sales, sales, sales! We need more sales is the common cry. But stop and ask if you are getting those sales efficiently. Here are a couple of financial measurements.

Advertising Results

There are numerous measures of advertising results, but here I want to focus on advertising to sales. Advertising to sales in calculated as:

Advertising to Sales = Advertising Expense / Sales

This is expressed as a percentage. Sounds simple enough, doesn’t it? But what is this telling you? Basically this is Read the rest of this entry »

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Employees and Sales Efficiency

Do you wonder if there is a way to measure if your sales justify your employee head count and payroll expense? Here are two ways and some refinements.

Payroll to Sales

Payroll to sales is a percentage calculated as:

Payroll to Sales Percentage = (Payroll Expenses / Sales) * 100

The lower this percentage, the more it appears you are getting a good return in sales for what you spend on payroll. Of course there are some other things to consider, such as: Read the rest of this entry »

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5 Tips About the Income Statement

I’m amazed at how often someone looks at their company’s income statement and immediately zeroes in on the bottom line; the net profit. Of course, the net profit is important, but if you stop there you will miss some useful information that can be obtained from this statement. Here are 5 tips about the income statement.

Patterns and Trends

It helps to dig into the individual lines on the income statement. For example, suppose you are a distributor. Take a look at Read the rest of this entry »

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Improving Customer Payments

One of the biggest issues a business can face is past due customer accounts. Here are some ideas for improving customer payments to minimize the issue.

Deposits and Advanced Payments

If you are going to be spending significant amounts to complete something for a customer and it will take a while to complete, consider getting a customer deposit. Let’s say that you know the materials will cost $500 for something you will later bill for $1,000 to the customer. It will greatly improve your Read the rest of this entry »

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Ineffective Communication

You have probably had the experience of dealing with a company that is trying too hard. This can impact more than just customers and is done in a number of ways.

Looking for Information

I love learning new things. One way I do this is to subscribe to several email lists from companies that appear to provide useful information in my areas of interest. It always takes a while to fully assess if a new service I have registered for will be meaningful. There are, however, several things that will make me quickly unsubscribe from email notifications. Read the rest of this entry »

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The Danger of Seasonality

Having just recently ended the Christmas season and the madness this creates in retail serves as a reminder of how difficult it is to be profitable. This difficulty is even greater when a business has high seasonality. Read the rest of this entry »

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Misleading Financial Information

The blog posting Two Dangerous Financial Illusions looked mainly at sales and profitability and how these can often be misleading. Let’s look at some more areas where misleading financial information may present.

Overvaluation of Receivables

Whenever a company undergoes an audit (and to a lesser degree a review), there are certain items on the financial statements that warrant extra scrutiny. A main one is accounts receivable.

One common way that accounts receivable may be over-valued is when Read the rest of this entry »

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