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Creating a sales analysis report

A sales analysis report can help uncover invaluable information that can help you decide whether to adjust prices, change your product or services, or even create new ones.

Many small business owners review their monthly and yearly financial statements to gauge the progress of their company.

However, relying on financial statements alone to measure sales means you may miss out on identifying trends you can use to improve future sales. By creating and monitoring a sales analysis report — in addition to financial statements — you can pinpoint new opportunities to grow your business. Set up a sales analysis report template that you can use to track sales data.

The frequency for reporting and the level of detail in your data are two of the most important components to consider when developing a sales analysis, says Mark Gandy, small business financial consultant and founder of Free Agent CFO™ and G3CFO.

Step 1: Determine the data you want to track

A sales analysis report offers a chance to drill down into the performance of certain departments or specific products. Before you create a sales analysis, outline your measurable objectives, such as:

  • The prevalence of repeat customer sales at a specific location.

  • The number of new customers acquired in a given period.

  • Defining the most-frequently purchased product during a campaign.

Step 2: Plan the frequency of your analysis

Decide how often you plan to track sales (quarterly, monthly, etc.). Gandy cites flash reporting as an example of a daily overview from the previous day’s sales. Depending on your needs, you may have more than one sales analysis report with different variables.

“Frequency depends on the nature of the sales,” Gandy explains. You may want to report more frequently during timed marketing promotions or seasonal spikes than you would during a typical month.

Step 3: Set the variables you want to represent

Next, determine which variables will provide the necessary data to meet your objectives. The level of detail, says Gandy, addresses how granular you want to get with your sales analysis. He suggests starting at the top and drilling down to more detailed variables. For a basic sales analysis, start with high-level variables:

  • Date

  • Location

  • Sales amount

If you want to obtain details on a specific service, product line, or customer trends, consider including more detailed variables to gather granular-level data such as:

  • Product categories

  • Product number

  • Gross margins of products

  • Customer data (name, email address, or phone number)

  • Sales campaign metrics

Compile sales data manually or export it from point of sale and customer relationship management software into a spreadsheet.

Step 4: Graph your data

Once you have information in a spreadsheet, you can select options to automatically convert it into a bar chart or line graph. Use the visualized data to set benchmarks and show which sales variables areas are growing, decreasing, or maintaining a steady stream. Data can also be blocked in specific timeframes — monthly, quarterly, and annually — to view and compare sales performance during the holidays, slow seasons, etc. To gain a historical perspective of sales performance, you can also consider tracking variables in increments over the life of your business, a product, or a service.

Step 5: Analyze your results

Once you’ve charted your data, the final step in creating a sales analysis report is to provide analysis. Look for emerging sales trends by asking questions:

  • What products or services are customers buying together?

  • When are certain items or services selling most?

  • Is there a seasonal trend amongst buyers?

  • Are your repeat customers buying different items than first-time customers?

Note how your sales are changing over time. If something is performing poorly, consider the why behind it.

“If you do a sales analysis and look at the products that are not selling, that doesn’t mean that you get rid of them,” says Gandy. “It may tell you to correct something, such as ineffective marketing tactics, to get the sales you need.” Consider gathering customer feedback on those products.

If a particular product’s sales are lagging, consider seasonal fluctuations or alternative products being offered by a competitor at a discounted price. You may need to reposition products or target a specific customer demographic.

Once you’ve created a sales analysis report, you can use the results to help shape your sales and marketing strategies as your business grows and changes.

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