Industry and Trend Analysis
While every business is different, financial knowledge about other businesses similar to yours can help you set more realistic goals for yourself. If you have an industry association, you may be able to get standard industry numbers from them as well.
Some things to look for are profitability percentages, standard or competitors' growth rates, market growth projections, sales numbers and so forth. Some industry associations have sample business plans and/or budgets available as well.
How do your finances compare with others in your industry?
Think through your Financial Ratios. Revisit your Strategic Objective, which Financial Ratios give you the best information regarding the progress your business is making toward your objectives?
There's nothing like graphing your financial information to make trends leap off the page. When reviewing your Financial Reports, look for patterns or trends such as rising expenses or falling sales. Following are some examples.
- Rising or falling purchasing expenses
- Rising or falling sales
- Rising or falling labour costs
- Rising or falling production costs
- Rising or falling facility costs
a. What trends do you see?
b. Why do you think these trends exist?
c. Are they likely to continue into the future?
d. How can you influence them for your benefit?
e. What impact might they have on your overall performance?