Five Tips for Sales Analysis
July 9, 2021 | Lessons in Business Growth
#1: KNOW YOUR INDUSTRY AND MARKET
Sales occur when the consumer feels the price is commensurate with the value they receive. Industry and market standards can help you target your pricing to achieve that balance.
#2: USE BREAK-EVEN ANALYSIS
How much does your business need to sell to cover costs? Understanding the break-even point can open opportunities for improving production or processes.
#3: LEVERAGE KEY PERFORMANCE
INDICATORS
In addition to industry benchmarks, use information such as cost of goods sold, gross margin percentage, and financial statements to make informed decisions about customers, services, and product lines.
#4: EVALUATE CURRENT CUSTOMER BASE
Higher sales doesn’t necessarily equate to more profit. Strategically reevaluate customers in the bottom portion of sales dollars, gross margin percentages, and contribution margin but don’t cut a customer until you can replace them.
#5: A STRONG ACCOUNTING AND
FINANCE TEAM
As you grow, the more sophisticated and important your sales analysis becomes. It’s critical to scale your accounting team’s ability with your growth, or you risk not reaching your potential — or even being sustainable.
The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting, investment, or tax advice or opinion provided by CliftonLarsonAllen LLP (CliftonLarsonAllen) to the reader. For more information, visit CLAconnect.com.
CLA exists to create opportunities for our clients, our people, and our communities through our industry-focused wealth advisory, outsourcing, audit, tax, and consulting services. Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor.