Staying on top of the numbers

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Staying on top of the numbers

Retail businesses can be measured in dozens of different ways. So which numbers really matter the most? We give you three essential figures to check every week, plus some others to keep an eye on.

Three things to check every week

Sales

There’s no money without sales, so it makes sense to keep a close watch on them. Just remember to consider the wider context. For example, extra sales often come with extra costs.

Net profit margin

This tells you what percentage of sales income you managed to keep in the business. It accounts for costs and will tell you how good you are at generating profit.

Wages

Wages are probably your most variable cost. It pays to keep an eye on them. Smart staffing decisions can go a long way to improving profitability.

Five things to check every month or so

Last year vs this year

Compare sales from the same month last year to see if the business is getting stronger.

Budget vs actuals

See if things are going as planned.
If not, why not?

Liabilities

Stay tuned into what’s owed across loans, bills and taxes.

Money owed in

If you raise invoices, then check they’re getting paid. Follow up if not.

Cost of goods sold

Stay aware of inventory, transportation and storage costs to get your pricing right.

A bookkeeper can be a huge help in watching these numbers. They’ll produce monthly reports and will flag things that need your attention. They can even help you set up an accounting software system that allows you to generate many of the reports you need on demand.

Chapter 5: Taxes and all that stuff

Besides running a shop, there’s also the small matter of taxes to deal with. There are three main types to focus on. Let’s learn what they are and how businesses deal with them.

Read chapter 5