Being busy is not an indicator that you are profitable. Design indicators to confirm that you are profitable as well as busy. If they are designed correctly, they will give you early warning signs to turnaround your business before it is too late.
Let’s say you have an ice cream store. You look at your numbers and sales are less than Budget both in quantity sold and dollars sold. Numbers are the easy part, now try to figure out why you are not making money. You are busy selling ice cream every day but you don’t have any cash left at the end of the day. Is the cost of making the ice cream too expensive? When you set your selling price did you include throwing away the soft ice cream at the end of each day? Can you save that ice cream and make flying saucers? Are you offering too many flavors?
You may say, I don’t sell ice cream how does this apply to me? There are always hidden cost. Things you did not think of when you set your price. Be honest with yourself. Take time to look at the numbers that can point you in the right direction. I know you would rather make ice cream than look at your numbers but you also want to make sure you have a profit to enjoy at the end of the year.
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