I was talking with a newsagent the other day and was surprised to discover that they discover the profitability of their business twice a year, when their accountant meets with them, and even then, the information relates to a trading period from two or three months prior.
They have no processes in place to track and report profitability more frequently. They are not looking at GP% mix, say, weekly, looking for trends.
Their reasoning is that the accountant is the expert and that as the retailer they do not have the skills to understand the business performance at that level.
Not knowing business profitability at more frequent intervals and close to the actual performance is a problem for any business.
Gross profit is the pot from which you pay rent, employees, loans and yourself. Not managing that in a timely manner can see a business slip away.
Too often I see local independent retailers get caught in a narrative no one has any money or the economy is really tough or we’re busier than ever or no that doesn’t sell. More than half the time the statements are checked with business data, which is rare in itself, the statements are not supported by the business data.
My point here is that what matters more than anything else about newsagency performance and any local independent retail business performance is what business data report, your P&L, profitability reports from your POS software, your evidence. Your business data will guide better business decisions. Waiting a month or two for an accountant to provide their take on what they see is too long.
If you own a newsagency you need to be serious about your business data as it sets you up for trading profitably and selling more easily when that time comes.
So, are you making money in your newsagency?
Seek out that information and establish processes for you to have easy access to the information regularly. If you are not making money, your only option is to make changes in the business. There is never a real barrier to making such changes.
Fixing profitability starts with knowing where you are at.
Not a truer work spoken. I am the same and cannot believe that a lot of people are not on top of the money side of the business.
A great report that we use daily, weekly & monthly is the detailed takings report. It will show GP, as long as you have the correct information in the system which everyone should by arriving stock in correctly.
A quick look at this report and their is lots of information.
This is good advice. before when I was an old type of newsagent all I wanted was for the shop the be busy. Since I started to focus on the gross profit percentage performance a full shop is not as important. Newspaper publishers have a lot to be responsible for for the damage they did to our perception of how to run a business. Like I said, good advice here.