know your juice bar profit and loss statement inside out
If you don’t know how much money you’re making or losing, then you don’t really know your business. Your juice bar profit and loss statement is key to knowing your numbers. I say that because I have seen new business owners make this mistake so many times.
I was recently consulting with a woman whose juice bar has been open for five months. She was just getting to the point where she was making enough to pay her staff, but still not making a profit. The more questions I began to ask her about her numbers, the more I realized that she didn’t really know them.
Knowing Your Financials Should Be a Priority
This is not acceptable no matter what stage of the business you are at. You could literally be selling a product that isn’t making money and not know it. I have seen a lot of people not survive the first phase of their business because they weren’t on top of their financials.
One of the first outside people you should hire, if you don’t start out with one, is an accountant. You can get someone good to manage your books for only a few hundred dollars a month and it will be well worth your money.
The main point I want to make here is that you want to be as aware of your financial situation as possible. You can create systems where you are getting even daily printouts of your numbers.
Here is an example of my financials from a specific month at one of my Los Angeles locations:
Becoming Familiarized With Your Numbers
I don’t want you to get overwhelmed by this, I simply want you to begin to familiarize yourself with this kind of information. The most important things to look at with these numbers are the relative percentages between each category. I offer this example not so you can compare your numbers to the actual profit margin, but to get an idea about ratios.
For example, your costs of goods sold is obviously closely tied to your gross sales. In terms of economies of scale, you also want to consider that especially your produce will become cheaper over time.
Your building lease cost and your payroll costs are typically going to be relatively fixed expenses. The more sales you make, the lower percentage you are paying for your lease and employee wages.
Something else to note is various generic categories like operating expenses. Make sure that if your accountant is organizing things that you communicate with this person and understand exactly what kind of expenses are going into each category. They may have their own logic about how expenses are categorized so don’t be afraid to ask questions.
Identify Trends And Make More Money
The bottom line is that you want to be looking at your financial profit and loss statements often, mainly so that you can identify trends and make adjustments. If you can’t see where the money is flowing and why you might not be doing so well, you won’t be able to make the necessary changes.
I offer consulting services around this topic and would be happy to take a look at your numbers. Sometimes there might be something glaring that you aren’t seeing. Within my online course I give you everything you could possibly need to launch a successful juice business from the ground up.