Bean Counting And Much More
“It is not enough to count the beans you must know where they come from.” I heard this when I was working in a CPA firm all the time from a partner who apparently had a lasting impact on my business philosophy. The essence of his message was that a business owner needs to know the customers, product lines or service offerings that are the winners and the losers in his business.
One way to do this is to dig a little deeper into your business. By digging deeper I mean to analyze what the most profitable business activities are. You can do this by using your accounting software to its fullest. Go beyond the standard reports and look at what your customers are buying and what you make on each item you sell to them. Many small businesses use inexpensive accounting software such as QuickBooks or Peachtree to track their income which is fine. They offer good reports and the ability to export data you select to excel for analysis. Taking this concept further you can look at what ZIP Codes you are selling to and adjust your sales efforts to tap into new, underserved markets. You may also want to run a report or create one that will tell you the date the last time you had a sale to a customer. If it has been a while since their last visit or order, a follow-up postcard or special offer might be a good way to make sure you don’t lose contact forever.
What else can you do? The ideas are only limited to your imagination, the time you have to spend to investigate and your appetite for digging into details. What about average sales order per delivery or by sales representative? Why does Sales Rep A have a higher sale per order than Sales Rep B? Is it luck or is it something that you can learn from? How about looking at trends? Run a report and see how many units you sold to your top 10 customers over the past 3 or 5 years. Which direction is each customer going – up or down and what are the reasons? Many times a small business owner has a good idea of the answers to these questions but sometimes there are surprising results.
A good accountant can help you with this and you should ask these types of questions if you are not getting this information. Ask your accountant about Turning Things On End To Achieve Results!
Have a great week, elbow deep in beans.