I seem to be growing and I am so busy but every time the 20th of the month rolls around I am out of cash.
My accountant tells me I am profitable and I have to pay tax but I don’t seem to have enough cash to pay my bills!
It is so easy to get busy doing, making it happen for customers and feeling like you must be winning! But then all of sudden you just don’t have enough cash to pay for everything, let alone yourself.
It is really important to get down into the numbers, that sounds exciting right? Well not really but you have to! Often when you actually work out your margin (the difference between what you are paying out and what you sell your product or service for), you find that you are not making enough to cover your operating costs.
Underrating this can help you make some real choices about pricing, suppliers, advertising and even work out what your sweet spot for sales volume actually is. No it isn’t always selling as much as you can.
Sometimes you can be much better off having a higher price, selling less but actually making more money!
So much important information lies in the numbers, xero and other accounting software can help, but if you are in the fast paced retail game you need info live right now to make the right decisions.
Check out “Square” this pos system is actually free right now as they make all their money in payments and they are yet to bring this to NZ, so have a look I think you will be blown away by the functionality and of course, it is free! https://squareup.com/
Do your homework and know what you need to achieve before your bank account does.