If your newsagency is challenged – losing money, risking closure, not paying bills on time – and you’d like help on this, here is a list of information necessary to asses the situation.
- A comparison of trading periods. Start with the latest three months compared to the same period a year earlier. In the Tower software, this is the Monthly Sales Comparison report. Compare transaction volume, basket size, sale value, GST collected and then unit sales and revenue by department and category.
- Report on items not sold in the last six months. Lets look at dead stock in the business, what’s not turning for you.
- A product efficiency report. Look at your top 20 items and what sells with those items – as well as the percentage of times those items are sold alone.
- Your latest profit and loss statement.
- A weekly analysis of gross profit weekly by week for the last thirteen weeks. Add a line for each week showing your labour cost (wages plus super plus any other employee costs including your own wages). Add another line showing lease costs.
These five overall packages of information will provide a good indication of the health of the business and the current direction in which it is headed.
Once I have all this information I can usually find steps to take to improve the situation. It could be that I have more questions that require a deeper analysis of data.
I often find that newsagents assembling this data for me discover opportunities in their business which they could have discovered long ago. One newsagent recently discovered stock not performing which they were certain was performing. Another discovered their roster was bloated.
My key message here is that data matters. Data can explain where your business is at and provide a pathway to a better situation.
If you can’t pay your bills I’d be looking at sales versus stock holding versus profit by department.
Run a business analysis report for the last 52 weeks for averages and see how well each department is performing versus your stock holding.
Start with magazines, what is your level of sales versus stock holding versus profit. Stock turns are like compound interest and the magazine department carries too much stock on hand for the return it generates.
Early return your overstocks and keeping your stock levels constant by month will improve cash-flow immediately.
Thanks for the info Mark – your blog is terrific. I’m curious about #3 ‘product efficiency’ and if I could apply that to sales in my field of cafes and restaurants. Certainly a top 20 list would be useful – any thoughts on what else I would look at? Thanks – enjoy the U.S!
Ken, good software should be able to report on top selling lines and the top items sold with those top selling lines.This shows the value of the top items. If they are sold alone they are not as efficient in my view.