Wednesday, January 6, 2010

Settling the Dust

Christmas is over. Retailers across the country are adding up the numbers to see how they did.

The media is having a field day reporting about whether Sales were up or down and using that to determine who "won" or "lost". The problem is that the media are not looking at the whole picture.

Sales are only one number among many that tell the true story of a business. You also have to look at critical numbers like:
  • Expenses
  • Inventory Levels
  • Profit Margins
  • Cash Flow
  • Net Profits
  • Happy Customers (had to throw that one in, too:-)
To make all your decision based only on Sales is to decide what an elephant is by only looking at the leg.

My father taught me years ago that it is virtually impossible to get all those numbers to look good at the same time. But if you can get 4 or 5 of the 6 numbers going in the right direction each year, you're doing well.

So how did you do?

At Toy House and Baby Too I was able to...
  • Cut Expenses
  • Lower Inventory Levels
  • Raise Profit Margins
  • Increase Cash Flow
  • Raise Net Profit
  • Keep Our Customers Smiling
In a year where our Sales were down, we still found ways to make money and show a profit. And it wasn't as hard as many make it out to be.

Over the next couple weeks, I'm going to explore how we improved 5 of our 6 critical numbers so that you can learn from our example and apply it to your business. Some of the steps to take are so incredibly easy, you'll kick yourself for not having done them already (I kicked myself at least three times this year.)

Stay tuned...

-Phil

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