Sandra’s Story! (2)
We hope you’ve had a wonderful week.
Last week we started the story of our dear friend Sandra, and how despite the fact that she was making sales running into hundreds of thousands, she couldn’t fend for herself, but instead still had to rely on her parents for a monthly stipend to maintain a comfortable lifestyle.
As we highlighted in our last newsletter, we searched for facts around Sandra’s situation and almost immediately, we began to see what the problem was.
These were the questions we asked Sandra to gather enough data, when searching for problems relating to business finances, you may ask yourself these same questions:
1. How much am I spending?
Now this is not just the cost of the goods you resell, or your raw materials, but also the cost of transportation to the market, cost of replacing that faulty machine, or the added cost of buying better quality. Generally, it is the total amount you spend, including miscellaneous expenses, to get a ready product to the paying customer.
2. How much am I charging for the product?
The maximum amount a customer is willing to pay for your product.
3. How much is my turnover?
The total amount of money you have in your hands, or at the bank, when sales are completed, and deals finalised.
Be very objective when asking yourself these questions, you have no one to impress with your numbers, lay it out in front of you and look for anything that jumps out at you as being too much, too little, or just plain unnecessary.
We gave Sandra a few days to itemise her answers to our questions and relay them back to us. You yourself can do the same if you realised in your personal business that there just doesn’t seem to be enough.
Next week we will look at the answers Sandra gave us, and together we would decide if truly she was the architect of her own misfortune.