You don’t have to be a financial expert or spend hours every week looking at your numbers to make more money in your business. Just select and use the right tools regularly and you’ll find more money in your pocket every month. Our Top Five Know Your Numbers list is a starting point to your financial freedom.
- Annual Budget – Creating a budget is a proactive step to taking control of your business finances. Start the year with a profit and pay plan for yourself that motivates you to make it a reality. Think of your budget as your financial road map for the year ahead.
- Know Your Costs – Categorizing your expenses into fixed versus variable is a key step to cost management and increased profits. Your fixed costs remain a consistent amount regardless of the number of pets you service. Items like rent, advertising, utilities, insurance, and your salary are considered fixed costs. Variable costs will fluctuate based on the volume of pets you service. Staff wages and supplies are typically the largest items in this category.
- Pricing Strategy -Your business is unique and now that you know your costs you will use that information when setting your prices. While it is good to know what your competitors charge for services the most important number is knowing that your prices cover your fixed and variable costs plus provide a good profit percentage to your business.
- Monthly Review -Review your key financial reports every month. The most important report is your Profit and Loss statement compared to your budget. Your monthly financial review meeting with yourself is a key step to making more money in your business. Use your financial report information to proactively make changes to increase revenue or reduce expenses so your pay is not negatively impacted.
- Key Performance Indicators (KPI) – Defining a core set of KPI and monitoring trends helps you understand your own business cycles. Compare your KPI to the same month of the prior year as well as current year monthly trends.
It’s a great month to join The Dog Gurus as we share easy tips and tools on each of these to help you know your numbers and make more money!