Modern entrepreneurs can suffer from information overload. Every media outlet has a plethora of data that they can present to businesses in the process of making informed advertising decisions. The Emporia community has events your business can get involved in almost every week. Market data that highlights demographic, psychographic, and geographic information is available at the touch of a button. Businesses that use accounting software, or use a local accountant, have a series of financial reports available that provide a current forecast for the business. The local Small Business Development Center provides cash flow projections, Ibis World reports, and internal analysis that can help keep a business on the right path. With all of this information available, some entrepreneurs simply get lost in a sea of numbers.
All of the aforementioned reports are critically important to understanding your business past, present, and potential future. However, most entrepreneurs need something simple that they can glance at to help them easily spot trends and help make decisions. A business journal is one of the simplest methods that can connect a small business person directly to the “30,000 foot view” data points that allow for trend identification, maximization of opportunities, and threat mitigation. Tracking a few data points on a daily basis can identify highlights highs and lows within a business, and significant changes may encourage entrepreneurs to take a closer look at other forms of data. Below are a few data points you should consider journaling, and a few helpful links.
1. Date/Day- Noting the day and date can help you look back and spot trends. With enough information, you can extrapolate future staffing, buying decisions, hours of operation, and more. It seems obvious, but remember that days may have different dates in past years. Your awesome Saturday may only look awesome in comparison to a Monday on the same date in a previous year. Over time, you may see a pattern emerge as different holidays fall on different days, and impact sales both before and after celebrations.
2. Gross Sales- This data point doesn’t automatically recognize profitability, but it is an indicator of sales volume. If you look at your gross sales over a week, month, or quarter, you can typically spot opportunities or mitigate emerging threats before it is too late. Looking back over previous years can help you extrapolate future sales based on current gross sales of items.
3. Items Per Sale- In the world of retail, the saying goes: “Sell one item, you are losing money. Two items, you are breaking even. Three or more, and you are making money.” The more items you sell to your customer, the more efficient the selling process for the business. Items per sale is an important metric in the retail and restaurant industry, and it is generally an indication of the quality of your products, sales staff, and the perception of value the consumer gets by bundling certain items. Tracking your items per sale may indicate the relative strength or weakness of your inventory, the quality of the “up sale” technique within your staff, or the ability of your marketing efforts to encourage multiple purchases per ticket.
4. Foot traffic- The higher the volume of customers, the greater the sales potential IF you can convert “lookers” to “buyers”. Tracking foot traffic can be a helpful statistic for staffing, and when you couple foot traffic with other data points on this list, it can assist in generating an impact model for internal and external activities. The following article includes several links to tracking and measurement systems (CLICK HERE).
5. Staffing- Tracking the sales, traffic, and items per ticket can be helpful if you can also see the impact your employees have on the data points. A good “crew” can improve sales, items per ticket, and even influence traffic. Finding the right mix of employees can help businesses succeed in the long term. Rewarding high functioning employee teams can create a culture of shared success. If sales aren’t impacted substantially by shifting employees, it may be an indication that your business is more product driven.
6. Weather- As much as we would like to, we can’t control the weather. Rain, ice, heavy snowfall, excessive heat, or other extreme weather conditions can discourage customers from visiting your business. A temperate spell after inclement weather could result in a burst of activity. Tracking weather can help you understand staffing and project sales more accurately.
7. External Events- Emporia is becoming known for some high quality, large scale events that bring people to the community. When businesses take an active role in finding ways to coordinate with local events, they can drive additional traffic and sales. When businesses simply expect “more people” to equal “more sales” they can be disappointed. Holidays, and when they fall during the week, can impact traffic and sales. Events in other communities that pull people from this area away from Emporia can obviously impact traffic and sales. Tracking external events is a good way to track the internal quality of your marketing efforts and your creativity in converting area traffic into foot traffic and sales.
8. Internal Events- Activities inside your storefront require an investment of resources. Tracking the return on your resource investment is an important part of long term event planning. Is your activity driving foot traffic and/or sales? How does the traffic compare to a normal day/date within the time period? Taking the emotional decision making out of an event by looking at the actual impact (both during and after the activity) is important for long term success.
9. Other- There may be other external or internal factors that can cause sales fluctuations. If a water main bursts, and you are a restaurant, you probably aren’t going to have a great day. If a tour bus decides to stop, and everyone files into your business, you may have a tremendous day. Recording abnormalities that impact traffic and sales can add context to business trends.
There are online journals that your business can customize, like the DAY ONE app. Many businesses will keep a simple computer spreadsheet with some (or all) of the categories listed above. You can plot out a notebook page for a physical copy of a journal. For an example of a daily journal, CLICK HERE.
Remember to compile your data weekly, monthly, quarterly, and yearly. The running totals can enable you to better forecast traffic, sales, staffing and other data points that can impact your business. Entrepreneurs that can engage in future planning can decrease costs and increase profitability. A more profitable business that you can plan for is what you want, right?