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
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
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.
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