Enjoy this free access to some of The ROI's proprietary resources. Ready for more? The ROI's Members-Only Collection includes much more for owners interested in profit management and growth.
Are your profits hiding in plain sight? Here's how to discover them.
Use "buckets" to cluster them and consider "what if...?"
The typical accounting package lists expenses in alphabetical order. From Advertising, to Auto Expenses, then Bank Charges, and so on. Lines and lines of separate expense items, all detailed to the penny. How useful is that?!
Is this designed to inform? Or, to confuse and confound? No wonder few retailers will spend much "quality time" with their financial statements.
But, there IS a simple trick that will let you make sense of all that data: simply re-organize the individual expenses on your P&L into 5 "buckets" of expenses.
That simple step transforms all that accounting data into management information. At The ROI, we call this process the PROFIT Finder!
Whether you are analyzing your expenses, or projecting a "What would happen if I...?" scenario for your business, it is more useful and insightful to group all the line-item expenses into 5 major categories, or "buckets".
By grouping expenses into these "buckets", you immediately turn your P&L data into management information. Now, it becomes easy to:
-- monitor expenses
-- make comparisons to prior years
-- quickly spot which buckets of expenses are increasing.
Very quickly, you know where to focus to control expenses...and improve profits!
One-Time Set Up - Works Forever!
Best of all, setting up your P&L to include these buckets only needs to be done once. Once set up, it just cranks out the numbers in a way you actually can use.
What's that? You've not yet organized your Profit & Loss Statement (or P&L, or Income Statement, or Operating Statement) into these useful categories for analysis and planning?
Not to worry! Here is a fast-track solution for you. Go here to use The ROI's SPEEDY Expense Analyzer (aka, the "Bucketizer").
And even more for ROI Members!
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Easy Inputs. IMMEDIATE Results!
Hmm. Want to consider some tweaks? No problem.
Just adjust your entries. Compare as many outcomes as you like. That's the power of "What if...?"
Online Calculators to Project Retail Profits and Cash Flow - Integrated!
SPEEDY PROFITS and CASH Forecaster • Retailer's 3-in-1 INTEGRATED Cash FLow Calculator
Explanatory How-To Articles - Used and loved by retailers worldwide!
Myth of the Bottom Line • How to Read and Use Your Financial Statement • Retail STRATA:G® Wheel • Rate Your Store from the Shoppers' Perspective • Measure, Monitor, Manage Your Store's Vital Signs • Four (Only!) Ways Retail Businesses Grow • Sales Forecasting: Part Art, Part Science • Top Five Killers of Retail Businesses • How to Manage Your Most Valuable Asset • Teaching Salespeople to Sell • Glossary of Retail Financial Terms
Webinars from The Co-Founders - Lively and empowering!
How to Project Your P&L • The TREND TRACKER - Up? Down? Sideways? • The Four Financial Wheels Under Every Retail Business • The Remarkable Retail STRATA:G® Wheel • Using SPEEDY Profits & Cash Forecaster
Online, Self-Paced eLearning Courses - Learn it once. Use it forever!
Projecting and Controlling PROFITS
Short How-To Videos - See it in action!
How to Use the "Bucketizer" • How to Project Retail Sales and Expenses
Online "Gadgets" - Get Quick Insights
The "Bucketizer" • Trend Tracker form (.pdf) • The Store Rater
What "buckets" to use?
Variable expenses are a percent of sales, so their dollar amount varies each month as sales increase or decrease. The major variable expense for retailers is Selling Expenses.
Selling Expenses - Variable expense
Examples: Store payroll, including taxes and benefits; Advertising; Bags & boxes; Special events; etc.
Fixed expenses have essentially the same dollar amount each month on average, no matter what sales are. There are 4 categories of fixed expenses:
Occupancy Expenses - Fixed expense, essentially flat $ amount each month
Examples: Rent; Utilities; Maintenance; Security; CAM charges; etc.
Administrative Expenses - Fixed expense, essentially flat $ amount each month
Examples: Management salaries (Owner; General Manager; Buyer) including taxes and benefits; Support staff/services (bookkeeping; IT; warehouse; marketing); Interest on borrowed money; Professional services (legal, accounting); Training; Travel; All other expenses not included elsewhere.
Taxes - Federal, State, Local taxes not included elsewhere.
Depreciation/Amortization - Fixed expense, essentially flat $ amount each month.
These are non-cash expenses, and must be kept separate in order to project the Cash Flow.
Since 1999, empowering retailers and store owners to "Turn on your financial headlights!"