When it comes to running your own business you have so many areas that you have to keep an eye on. Some of these may include, payroll, HR, logistics etc… It is easy to get off track and shift your focus elsewhere. That is why it is so important to manage your time correctly and conduct monthly financial reviews.
Without having your finger on the pulse of your business’ s financial health, you wont truly know what you are doing right and what you are doing wrong. Part of your monthly routine should involve the following:
Sales Forecasting: the process of a company predicting what its future sales will be. This forecast is done for a particular period of a time in the near future, usually the next fiscal year. Accurate sales forecasting enables a company to make informed business decisions.
Marketing Plans: a comprehensive blueprint which outlines an organization’s overall marketing efforts. A marketing process can be realized by the marketing mix, which is outlined in step 4. The last step in the process is the marketing controlling.
Monthly Sales Meetings with Staff: is not always a presentation format; it can sometimes be an informal conversation, phone call or online affair.
Profit & Loss (P&L) Review: is a review of financial statements that summarizes the revenues, costs and expenses incurred during a specific period of time, usually a fiscal quarter or year.
Now the first three bullets are pretty self explanatory…if you don’t have goals then what exactly are you striving for and how do you know you have what it takes to hit them. However, the most important thing a business owner can do is conduct a monthly P&L review.
By doing so you will know where you are allocating your funds, what percentage your cost of goods are, a breakdown of your average profits and what areas you may be spending too little in and what areas you may be spending too much in. The most important part of your P&L review will be to come up with a break even for you business. Again, if you do not know what you need to sell in order to survive and more importantly be PROFITABLE, then you probably won’t do either.
As a small business owner or franchise owner you have to make the time to sit down and go over your business’s financial health monthly. It will only help you add structure to your days and help give you and your team the numbers and goals they have to hit in order to be a thriving, profitable business.
Written by Wilburn Taylor | Franchise Training & Support Manager