While there may be several things that separate successful business owners from struggling startups, one is vital to performance -- reporting. For one thing, a company can only know it is profitable and successful if it has the profit and loss statement to prove it. Is the owner working only break even or is there a healthy margin…and is it gaining?
That is an important distinction and one that I am constantly amazed isn't the backbone of every business, regardless of size.
Many of you know from previous blogs that my family runs a small non-vending business. Quite frankly, it has seen a slow patch. The day-to-day operations managers called a meeting that included all the silent financial partners. In the course of the meeting, we began to discuss marketing strategies and new product offerings. Sound familiar? I think I've written those very words when I talk about vending operations. And because of my experience with success stories in this industry, I asked about the available reports so we could establish a benchmark on which to measure the effect of our new marketing and product lines. I was met with blank stares. Turns out that a P&L existed, but it wasn't detailed. It did not include specific product categories, types of services or top-selling day parts. We couldn’t even get a list of largest revenue generating customers. I was stunned.
I don't mean to regale you with the struggles of my family business. I simply use this real-world example to illustrate an important lesson. Sales will slump, and when they do, you need to have some detailed reporting in place so you can analyze your next move. There needs to be a baseline, a snapshot of your current sales within categories that you will be expanding. That way, when you invest in a particular area, you can see improvement, or lack thereof.
Not all ideas will work, and having these numbers will help you identify when you've invested in an expansion that isn't producing the hoped for results. You are able to cut your losses and move to projects that will produce better synergies and build revenues.
Taking the time out of business schedules to review reports isn't always easy. But it's something operators must make a priority. Most of the large operators that have been in business for decades use reporting to expand into fast-growing segments and analyze where they should put their money. It's an investment nearly every vending success story includes.
I'll admit that knowing what numbers and reports to pull is tricky, or can be. Often we are hampered by a lack of knowledge, an overwhelming amount of data and limits of software. However, success needs to be measured. It needs to become a priority and investments of time and money must be made in order for the future direction of a company to be steadfast and positive. There is no other way.
Intuition is valuable, but it can also be fallible. When sales stall and something needs to change, it’s important to work off of data and measure the outcome. Investing the time and money in data will likely mean I'll be writing about you in the next Automatic Merchandiser magazine success story.