Sales Analysis & Tips
Sales are the essence of any business. Control over them, understanding what to sell and to who is the most important part of the management system. Let's take a look at a tactical method you can use to analyze sales to keep your business profitable.
Comparative and Plan-Fact Sales Analysis
To monitor your business, regularly (at least once a month) compare revenue figures with previous periods and with the plan.
It is useful to correlate the data with the results of competitors if such information can be obtained.
Key indicators for sales analysis:
- Revenue in dollars and in physical terms: units, kilograms, etc.
- Profit from sales.
- Profitability is the ratio of profit to revenue.
Analyze revenue, profit, and profitability, both for the business as a whole and in various aspects: by product groups and individual products, by region, by responsible managers, etc.
Compare actual sales against targets at different "tiers." Divide the annual budget into quarterly plans, then monthly, weekly, and, if necessary, daily.
When you close each reporting period, take stock not only for it but also pay for the next period - a longer one. For example, we can summarize for the week and immediately see how the monthly plan is being fulfilled. When we close the monthly plan, we will check whether the quarterly plan is being fulfilled.
When analyzing sales, pay attention to this key points:
- The total volume of sales: it should, at a minimum, ensure your business works without a loss and financial stability.
- Increase in relation to the previous month or year.
- Fulfillment of the plan both in terms of revenue and in terms of profitability indicators.
- Factors that influenced the deviation from the plan.
Distribution of goods and customers depending on the revenue generated and the stability of demand.
See you some other time. Thanks for visiting my blog.
This is @benie111
I would like to hear from you. Do you have contribution or comment? Do well to drop them in the comment section
hi @benie111 - these are important sales metrics. In some industries, pipeline is also important. I work in an industry where sales take a long time to close (some times 6 months) so having a healthy pipeline is nearly more important than what we have sold in any particular month which may go up and down.
Great choice of topic!
Definitely. The type of industry determine strategies. Thanks for coming around
Your advice is great! I really hadn't thought of any of this before reading your post.
And I think the most important thing of all is to have a planning to be able to move forward.Analyzing sales by sector seems like a great idea to me, it shows that you are a person who knows a lot about this subject, and I thank you for sharing your knowledge.
Thanks for coming around. Yeah I agree that analyzing by sector is not bad at all.
Hello @benie111
The data that you mention in your publication is very important, the key being the comparison and analysis between periods.
Excellent read, thanks for sharing.
Have a great day!
Best regards.
Thanks for your contribution. Sales analysis is just one very important act to be done once we know how necessary it is.
My own little contribution is that while making sales, we need to pay attention to the profit made, there is no need making sales if there won't be a profit attached.
You are making sense. One of the major reason for business is to make profit