Every day a business has expenses. Sometimes the money comes in and sometimes it doesn’t.

* Is your business experiencing holiday stagnation or holiday burnout?
* Are some parts of your business busier than others (sometimes)?

There are two ways to measure sales: count money or count sales. Sometimes they are related and sometimes they are not. Let’s look at some ways to solve this.

How many sales?

Sales volume over time is the number of items a company sells per unit of time. A sold item is a sold item, whether or not it is discounted. A business can track sales volume by customer, by product or service, by product group, or by location. Inventory turnover is also a simple measure of sales volume.

* Sales volume is billable hours for accountants and attorneys.

* Sales volume is the widgets sold by a company that sells products.

* Sales volume is the number of closings for real estate agents.

* They are policies written for insurance agents.

The number of items sold is a key measure of business activity.
Large volume changes are easy to see, but most changes are incremental and not as obvious.

Changes in revenue do not necessarily predict changes in volume. A high-volume sale can mask a drop in the number of sales. A company needs to know both numbers.

We want to analyze sales volume patterns and their effect on your business.

seasonal businesses

Some products and services have natural high seasons during the year. The best seller in the world will have trouble selling air conditioners in Canada during the winter.

* People buy more air conditioners in the summer.

* They are also more likely to buy a refrigerator in the summer

* Stove sales peak ahead of culinary frenzy from Thanksgiving to New Years.

* Gym membership enrollments peak in January.

* Consumer electronics sales typically peak in March and April. The exception is big screen televisions. They peak just before the Super Bowl.

* Wine and liquor stores sell more than twice as much product in December than in any other month.

Some products, like cars, are cyclical and seasonal.

Track your sales volumes each month to see if this is true for your business. Compare from one year to another. These numbers can also measure incremental improvements in your business or give you an early warning when things aren’t going quite right.

cyclical business

External factors influence some businesses more than others.
Cyclical businesses are in sectors of the economy that rise and fall with things like interest rates or tax laws. Cycles can be short (months) or long (5-10 years).

* Mortgage volume rises and falls with changes in interest rates.

* Low interest rates drive new home construction.

* Health insurance costs are tax deductions for employers.

* Changes in tax law can push businesses from one state to another.

Small businesses cannot control these factors. Staying in business requires a frank and honest look at cyclical drivers and a flexible and creative response to change.

What can you do?

Appliance store owners have a higher success rate than many other types of small businesses. Let’s look at your income streams.

* They sell refrigerators in summer.

* They sell stoves in the fall.

*They have white sales in January and February.

* They sell vacuum cleaners because they pass dirt.

* They sell parts and services: breakdowns are much less seasonal than sales.

Car sales are cyclical and seasonal. They depend on interest rates and peak sales are in the fall. Sellers earn commissions so owners have no fixed salary costs.
However, because repairs and maintenance are not seasonal. These employees tend to have a salary plus a commission.

Measure your sales and act

We can help you identify the patterns in your business and your industry. We can identify solutions that structure your business to smooth your sales and income. We are Biz 4 the rest of us.

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