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Edition 379 – Seasons

It’s cold in this part of the world. Not the northern hemisphere, locked up in my house for months with nothing but white outside type of cold. (I’m looking at you, Phil Symchych in Regina, Saskatchewan, Canada).

 Nevertheless, it’s cold enough for me. Some of the mornings are below zero. Only just below zero, but enough to mean the hands and feet ache if the gloves aren’t on and the socks not thick enough.

The colours on the deciduous trees have been magnificent this year. They always are, but this year, the shades seem more vivid than in the past. Perhaps it’s all that rain the past few years, doing good for the environment. Or, perhaps it’s just me, more appreciative of the colours as another autumn, then winter, passes through my life.

It’s interesting to note the impact of the seasons for some of the family businesses that we work with. For others, it’s events throughout the year that are outliers in the monthly numbers.

For many of our clients, we put together a dashboard of the key numbers in their business. They’re not the financial numbers, like you see in a Profit & Loss Statement, though some of the numbers are dollar related. A lot of the the numbers are activity driven. So, things like:

  1. Units sold.
  2. Average dollar value of a sale.
  3. Customers through the door.

These are the numbers that no one takes notice of, yet without knowing them, you can’t possibly know how your business is running.

Once you’ve got a few years of data in the dashboard (or you’ve backloaded prior year data) it’s interesting to analyse what’s happening month to month, year on year.

For one client, whose business operates in a cooler climate, at one stage, we were recording the weather each day. There was a rollercoaster pattern of trading happening at different times of the year and we couldn’t put our finger on it. My philosophy is “numbers are reasons in disguise”, so by drilling down on the numbers and asking lots of questions, we figured out that once the maximum daily temperature dropped below 10 degrees celsius, customers in this retail focussed health care business stopped turning up. The business is located in a strip shopping precinct and if the air is cool and the wind is up, people stay home.

For another client, when recently analysing the data of the past three months, we drilled down on the variance between this year and last year. Why were some numbers up and some down? It turns out that last year had a number of big, one off sales that were explainable variances on the revenue. When you took them out, year on year was the same, not down, so the first impressions of how the business was trading were not right.

What was interesting in that analysis, however, was the identification of the upward variance in one month this year vs. last year. A large order came in, from a new customer, from interstate. A bit of googling showed the huge potential of this customer and as the conversation continued in our meeting, we identified the opportunity this could present if the business reached out direct to the client and found out if there was anything else in the business’ suite of products that might appeal to the customer. The numbers created a conversation, which identified an opportunity.

When you look at a set of financial statements, all that will tell you is “this year vs. last year” and nothing to do with how the revenue and profit of either of those years is comprised.

When you firstly build, then secondly analyse the dashboard, it leads to a whole bunch of questions about how your business operates and where it could improve. It’s powerful stuff.


*”If you’re not looking at your numbers at least weekly, you’re business will get away from you.”