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Next, we'll look at where to look for growth points in your business. In my last article, I talked about the 5 key financial indicators that need to be tracked correctly. Read the article here.
Today, we look at 6 more indicators you can't turn a blind eye to if you want your business to grow.
1. BUSINESS PROFITABILITY
This indicator shows how efficiently a company's assets are used and how well they generate profits.
BUT! If you concentrate too much on maintaining profitability, you can stop your business from growing. That's why sometimes you have to sacrifice profitability for the sake of bigger goals.
2. CASH FLOWS
It is important to control how much money has flowed into the company over a given period. This will allow you to track seasonality, increase in demand, draw up a sales plan and forecast work for the next period.
3. ACCOUNTS RECEIVABLE
The owner needs to know not only what the buyers owe, but also when the money will be credited to the company's account. Controlling debtors is vital. It is better to stop work or trade than to increase debt.
4. POINT OF THE LION
This is the amount of money it takes to get a business off the ground. When calculating this indicator, it is important to take into account fixed and variable costs. In addition, the owner needs to understand how long it will take for the company to reach this point.
5. AVERAGE SELLING PRICE
This indicator must be calculated per product, per sales manager, per dynamic (hours, days, weeks, seasons).
This way you can see when the company is earning more and when it is earning less, and you can influence these processes.
6. THE PERCENTAGE OF MARGIN FOR EACH PRODUCT
This indicator is used to identify high and low margin categories. And it gives the entrepreneur the opportunity to increase the sales of the former and reduce the sales of the latter (unless they are deliberately reduced).
Keep an eye on your financial dark spots and make business decisions based on the real picture, not intuition.
Before booking a consultation with a specialist, please write your question.
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