Heating, lighting, staffing, rent, supplier costs, transport, refunds, time spent on fulfilling orders, meetings, calls, emails, all play a part eroding your profit!
Starting off a business in the right way will enable you to make decisions based on facts and pivot your business to where it has the most chance of success. Operating blind on a day-to-day basis just leaves yourself open to the probability that you won’t make much or any money out of what it is you thought was a great idea. The chances are, that it still may well be a great idea, but you didn’t give yourself the best possible chance to succeed.
I’m not saying you must have a CRM, I’m saying you MUST. GDPR laws state that you must have a system in place to securely store customer data, track who has opted in to receiving communications from you and could ‘forget’ a customer by removing them from your database. So at the very least, you need to be able to comply with those requirements.
So why not put something in place to fulfil those obligations? Its highly likely that this same tool can also be used to manage your business, automate processes, provide vital analytics and ultimately, boost sales, now you will have a powerful system to get you business. And it really doesn’t need to be the biggest, best, most expensive system, just one that fits your business.
If you have intentions of growing your business to a point where you are looking for investment or indeed to sell the company, then anyone who is looking to invest / buy will, from the very outset, be asking you for essential metrics to get a feel for the business.
– Cost of Goods Sold: £50
= Gross Profit: £50
– Operating Expenses: £30
= Operating Profit: £20
– Taxes: £5
Net Profit: $15
So, if I were to ask you all of the above questions, today, right now, how many of you would be able to answer even half of those questions? How long would it take to gather that data? Would you be frantically rushing around asking your team, pulling spreadsheets together, asking your accountant? Even if you aren’t looking for investment or a sale, it’s just good practice to keep your finger on the pulse.