Know Where Your Revenues Are Coming From

Income or revenues come from different sources; sale of goods or services, renting of an office space or equipment, commission, royalties etc. It is important as a business owner to know where your income/revenue is coming from, as this will determine the success or failure of your business. Do you sell on credit or are your transactions all on a cash basis, if you sell on credit, what are your credit terms?

Few questions to consider;

• Do you sell only one type of product or service? Or you have multiple products and services?
• To make sense of your sales, it is best to group your products and services by type.
• For example, if you are selling clothing for both male and female; it would be best to group your sales into two different categories. A category for male and a category for female. This will make analyzing your sales more efficient.
• With separated categories, you would be able to tell what each category is contributing to your profit margin.
• Categorizing your sales can also help you select the right pricing strategy for your products or services.

Moment of Truth: What story does your sales report tell you? How do you use your sales report to make decisions?