Sales are the essence of any business. Control over them, understanding what to sell and to who is the most important part of the management system. Let's take a look at a tactical method you can use to analyze sales to keep your business profitable.
Comparative and Plan-Fact Sales Analysis
To monitor your business, regularly (at least once a month) compare revenue figures with previous periods and with the plan.
It is useful to correlate the data with the results of competitors if such information can be obtained.
Key indicators for sales analysis:
- Revenue in dollars and in physical terms: units, kilograms, etc.
- Profit from sales.
- Profitability is the ratio of profit to revenue.
Analyze revenue, profit, and profitability, both for the business as a whole and in various aspects: by product groups and individual products, by region, by responsible managers, etc.
Compare actual sales against targets at different "tiers." Divide the annual budget into quarterly plans, then monthly, weekly, and, if necessary, daily.
When you close each reporting period, take stock not only for it but also pay for the next period - a longer one. For example, we can summarize for the week and immediately see how the monthly plan is being fulfilled. When we close the monthly plan, we will check whether the quarterly plan is being fulfilled.
When analyzing sales, pay attention to this key points:
- The total volume of sales: it should, at a minimum, ensure your business works without a loss and financial stability.
- Increase in relation to the previous month or year.
- Fulfillment of the plan both in terms of revenue and in terms of profitability indicators.
- Factors that influenced the deviation from the plan.
Distribution of goods and customers depending on the revenue generated and the stability of demand.
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