A common mistake we see amongst food suppliers looking to grow their businesses is inaccurately forecasting their costs and profits. Let’s end this today. Here are four ways to start accurately forecasting in your business:
KNOW YOUR MARGINS
This should be the first step in any business. Determine how much you need to break-even and how to make it a profit. Knowing these numbers will help you determine which sales channels you should target, what your quota should be, and when it’s the right time to offer other services such as delivery and discounts to your customers.
SET ACCURATE DELIVERY COSTS
Delivery can be a make or break it point in your business. Make sure you know exactly how much delivery costs per hour and how to calculate it accurately. If you’re guessing these costs, there is a high chance that you are losing money. To help you out, we created this post and a calculator that does this for you.
DETERMINE YOUR MINIMUM ORDER VALUE
After you’ve determined your delivery costs, you have to set a minimum order value to offer delivery. You don’t want to lose money when offering a service to your customers – instead you should profit. This post outlines how to set this value along with a calculator. All you have to do is fill in the blanks!
THE POWER OF PRICING
Pricing is an aspect of your business you should never neglect. Slight increasing in prices can have a great impact on your annual profits. For example, a price increase of 5% can increase profits by 6%! Do the math and figure out exactly how much you can increase your profits with slight price increases.