The economy in many areas of the country is doing pretty good these days. A lot of distributors tell us sales and profits are up year over year. When I hear that, it reminds me of something someone told me years ago, “It's easy to make money when the economy is doing well. It's much more difficult to make money when things are not doing so well.” While business is going well is the perfect time to be examining those critical areas of our businesses that are key to success. One key area is gross profits.
It's easy to look at an Income Statement and see what profits are, but determining why profits are up or down is another story. When profits are not where we want them to be, then we have to ask questions like:
- Do I have a pricing problem?
- Do I have a costing problem?
- Are my sales people discounting too much?
Where do you go to find this detailed information?