Quality Management Information
The business world is divided into the haves and have nots - which one are you? Some have nots want it and others don't - fair enough, as there's no point in complicating matters if the information is not going to be used to increase profitability or value.
What's interesting, at least from our perspective, are the businesses that don't know whether MI would be of benefit because they don't have the experience. So here are a few thoughts to help this group.
Let's start with the very well worn cliché which never dates and bears repeating “ Sales is Vanity, Profit is Sanity and Cash is King". In a nutshell that is arguably the best business advice ever. The second best might be "If you can Measure it you can Improve it".
Let's look at measuring profit. What's needed is something like your year end accounts but much better in that they should be monthly, to allow prompt attention and they must be totally understandable to you, the owner and user. If not, it's going to be wasted effort. You will need to understand and focus on Margins as that is a key indicator of your profitability.
Beyond that, always look for a split of the business, such as sales of product separate from a repairing service. If you don't separate the gross margins for each then you're mixing and messing the information. Simple but crucial.
That's all, short and sweet. If that's whetted your appetite then do something about it and enjoy the extra profits.
Managing Director, BookCheck Ltd