Every funeral professional should do an “end of year review”. We all know that. In fact, you probably spend a whole lotta time just after Christmas worrying that you can’t pay for all those gifts that just went on your Amex, right?
So forget the “week after Christmas review” and start reviewing now!
Sure, that end of year bump you’ve been expecting might come in December, but a frank look at your year-to-date in the last week in November will give you an idea of how much ground you’ve got to make up over the holidays or, if you’ve had a good year, how much “gravy” can pour during the festivities.
As I’ve warned before (in the post, Call Your Accountant Early!) your financial advisors are going to be very busy come January 1st. So start now.
Are there new products or recurring items you order every January? Why not place an order now, with a shipping date in the beginning of January?
No matter what you do, make sure you’re spending some time reviewing your practices, how they affected your ability to serve families this year and what improvements you can make to improve the bottom line.
What things do I consider when doing a yearly review of our cot cover business? Good question! Here goes:
TOTAL SALES: I like this number because regardless of the total number of covers we sold, it measures our overall financial footprint.
NET PROFIT: Even better than a total of sales, this one tells me how effective we were at making our product profitable.
AVERAGE ORDER AMOUNT: Compared to our retail prices, this lets me know how well we upsell. I even break this down by product so I can see which specific patterns encourage more sales.
ADVERTISING PERCENTAGE: I like to keep this low (as a percentage of total sales), even though we make a fine profit and benefit from some of our advertising. Of course, I count lots of stuff in this one, like the costs to create this blog, our convention appearances, magazine ads, website costs, etc.
MATERIAL/OVERHEAD COSTS: I divide this cost by the total sales to figure out what percentage of the product price goes toward the cost of materials and overhead (like our workshop, equipment, etc.).
LABOR COSTS: This is what percentage of total sales I pay the employees. Even though I’ve hired some contract employees in the last two years (we’re up to four!) the percentage has actually gone down as sales have risen.
These are all things that I track on a monthly basis, mostly because my small company can’t afford any major unplanned shifts in our sales. And while we’ve moved to a much wider tightrope in recent months (snowballing sales figures have helped to put us on more stable footing) I know that an unexpected move in the market can still catch unaware.
What should you track? Now’s the time to decide what information will help you plan your business’ future. Get started now, before the holiday rush.
