Truly understanding what the numbers really mean is sometimes the most neglected part of running the business. And that’s where the story comes in. Ever number tells a story. They are all part of your business story. So often, the focus is on marketing and sales. But without the interpretation of accurate and timely financial information, most businesses are running blind and doomed to failure. You need to understand the numbers so you can see where your business has been (historical financial information) and where it’s going based on projected financial information. This helps you to run your business proactively based on informative decision making information.
Here are a few crucial numbers you need to know and monitor to control your franchise business operations:
Pay particular attention to cash flow. It’s still the king. Review the balance sheet, income statement and cash flow statement every month to assess net worth, net profits or losses and cash flow. On a quarterly basis, calculate the following financial ratios to evaluate key performance measures: Sales year to date Gross profit margin Cost of sales as a percentage of sales Labour rate as a percentage of sales
By comparing these ratios to those of franchise or industry averages, you can determine the progress of your business. You can then take steps to achieve goals and objectives to improve performance. Financial information is only useful if you know how to interpret it and use it to make smart business decisions.
We use online cloud based apps to help you tell your story. What numbers best tell your story? Are you using them to make informed business decisions?
Cloud Based Apps we recommend:
Xero for accounting and financial reporting
Shift Planning & Kairos for employee scheduling and time sheet reporting
Simple Pay for payroll
Vend for POS
Spotlight Reporting for financial and decision making reporting
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