Being able to recognize patterns is a very important skill that not everyone has, but one which entrepreneurs are quite qualified for, still, one of the challenges becomes as your business gets bigger, and you step away from the front counter, as you are looking at data and information more than you are talking to the customers or the employees on the front line. As one expands their business they are between these two points.
In other words, they are not looking at the analytical data because they believe they do not have to, or because they have not compiled it and would not know what to do with the information even if they had it. This is a dangerous place to be when expanding your business. It's dangerous because you are not running your business like an MBA graduate, nor are you running your business anymore as a hands-on entrepreneur, you are in between those two places.
Now then, if this sounds familiar there are some points I'd like to discuss with you, they will help you see some of the obvious patterns you may be missing in your business data, and after you read this article I hope you will please check that data, and use your entrepreneurial skills to fix those problems. Below I've listed five important items;
1. Employees Showing Up Late
2. Suppliers Making Mistakes on Invoices in Their Favor
3. Longstanding Customers Coming in Less Frequent or Not At All
4. Advertising and Marketing Techniques of the Past Not Brining in New Scientele
5. Sales on Most Profitable Items Slowing, Customers Only Shopping Sale Days and Sale Items
It is easy to lose a ton of money in labor, even when you are trying to cut costs in labor. For instance when employees show up late for work, or spend half the day texting their friends, or playing on Facebook. When was the last time you checked to see if your employees were showing up on time?
If they are showing up late every day, or punching in a few minutes late every day or worse having their fellow employees punching in and out for them, you could be losing hundreds of hours a month in lost productivity. That's money that you are already paying out, but you are getting anything for it. Make sure you check the numbers and the time clock data against the reality, after all, you are collecting the data, you may as well use that data to help you run your business better.
Have you eaten your suppliers and vendors making small mistakes on your invoices, but you figured they were just honest mistakes? Well let me ask you a question; are those mistakes that they are making on the invoices always in their favor? Legitimate mistakes will sometimes occur in your favor, and sometimes in theirs. If all of the mistakes are in their favor, they are cheating you purposely, and you are wasting money. In essence they are stealing from you.
Have you noted that your most loyal customers are coming in less frequently, or not at all? You may have a problem with customer service, and you need to talk to these customers, get a feel for what they're upset with, or why they are not coming in as often. Is your advertising still pulling for you? If it is not, you may find that your advertisers and marketing folks are putting your ads on the wrong page, or running your media ads on TV and radio at other than the prime times as they promised you. You should have the data, along with the coupon codes to take a good honest look at what's going on.
Lastly, are your customers only showing up to buy your sales items – are they no longer buying your most profitable Items? If this is happening, then where are they going to get those products, is your competition bundling products, do you have new competition that you do not know about? Is someone in another similar industry or sector also selling your most profitable items at extreme discounts to get customers to come to them? Is it just a recession and the general economics of the area? Your data should be telling you something, and when you see red flags you should look into those details. Indeed hope you will please consider all this and think on it.