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There is one word that comes to mind when talking about continual growth and expansion and that word is analysis. Analysis allows you to know the areas where you are succeeding and the areas where you need improvement or are even completely failing in. Whether it be professionally or personally the same principle applies. It’s in our human nature to want to continually grow and improve as individuals as well as to grow and expand our businesses. Let’s first start by looking at this from a business perspective.
Business Analysis
The best thing to do is to first identify problems that can be easily fixed. If you’ve owned and operated a business before you know one of the keys to knowing where your business stands is in a P&L review (Profit and Loss Statement). Let’s take a look at it here.
The Profit and Loss Statement
If you haven’t owned a business before, a comprehensive P&L breaks down all revenues and expenses into categories so you can see what specifically is generating revenue and where you are losing it. The P&L will help illustrate areas of success and areas needing improvement but it isn’t solely enough to read your P&L every month. You must analyze the data, come up with solutions for the problem areas, and find ways to expand on the areas of success. It’s an introspective consideration of your business.
The Budget
Analysis of your current budget should also be considered for growth and expansion. If you are finding a problem in overspending, maybe you overspent because there were three billing periods for the month instead of the typical two you usually have each month. Taking the time to identify those months with additional billing cycles ahead of time will help keep you under budget.
There are also untouchables to consider. Things such as utilities, rent, and other constants that you won’t be able to make adjustments on. However, there may be other areas of expense that you can cut back on, eliminate, or budget for in advance. If payroll put you over your budget that is an easy fix. Your business must always be cognizant of business needs, as much as you may hate to do it, during non-peak business hours or seasons the easiest cut in expenses is payroll.
Some things are not as easy, however. Let’s say you run a restaurant and you are over in your cost of sales month after month. Inventory and billing periods can alter this from time to time. However, if it’s a consistent problem then you must take a deeper look. This will require a deeper analysis of daily sales and inventories to identify problem areas to determine if it’s your vendor’s prices, your own prices, or yes even employee theft that is causing the problem.
Personal Analysis
When you are trying to grow and improve personally the same applies just in a less data-driven way. You must again take a hard introspective look and identify areas for improvement. Start by setting out clear objectives, and then identify a path to achieve those objectives. If your true goal is for self-improvement you must be critical of yourself without being harsh. Again, prioritize and find the things you can immediately improve and start there. Try to stay away from the things that you don’t have control over (the constants). Then, look closer and more critically at the larger hurdles to identify the true source of the problem.
Still looking for more great tips to improve yourself or your business? Check out our other blogs here!