April 3, 2025 • 23 mins
We’re in Q2 already! Time to take a step back, have a proper look at your numbers, and set yourself up for a strong second quarter.
In today’s episode, we’re going to chat about why it’s so important to know your numbers right now. Let’s review how Q1 went, make any necessary adjustments, and get you ready for the next 90 days.
For many of us, Q2 can be a bit quieter, which makes it the perfect time to dive into your metrics and make sure you’re on track for the rest of the year.
Today, I’ll take you through the key numbers to focus on and how to use them to plan your next quarter.
What's Inside:
[00:00] Why you need to know your store’s numbers
[05:42] The key numbers you need to know
[07:33] How often should you review your profit & margins?
[14:47] How to use Q2 as a reset button on your business
[21:00] What to do if numbers feel overwhelming
Resources:
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
It is April, which means that we arein the start of the second quarter.
(00:04):
Can you believe that the first quarterof this year has already gone past?
Hi everybody, it's Catherine Erdly.
I'm your host today as well as thefounder of the Resilient Retail Club.
That is my membership group, mastermind,and done for you services for retailers.
Head over to resilientretailclub.comto find out more.
So today I wanted to talk toyou all about the second quarter
(00:27):
and specifically knowing yournumbers for the quarter ahead.
So why is it so important for youto get a handle on your numbers?
Well, this is the perfect time for youto get a fresh look at your numbers and
to start thinking about how you've beenperforming in the first quarter, what
you want to do in the second quarter, andthen basically making any adjustments.
(00:49):
Now, I know not everybody's businessis centered around Christmas,
but for a lot of people it is.
And if it's not Christmas, thenyou might get a bit of a bump
for back to school in September.
Some people, obviously their peakis coming up in the summer, but for
a lot of people the second quarteris a little bit quieter or maybe
(01:09):
not like a full on sales quarter.
And so for a lot of people, this isthe perfect time to be spending a bit
more time looking at your business.
And the way I like to think about thesecond quarter is that you hopefully
put your plan in place for the year.
You've now seen the resultsof that in the first quarter.
You can then kind of look at that, adjust,make some plans for the second quarter.
(01:31):
And then also into the year ahead.
What I'm gonna be talking about is thenumbers that matter, the metrics that
you should be tracking, and then how touse that to plan out the next 90 days.
Welcome to the Resilient Retail GamePlan, a podcast for anyone wanting to
start, grow or scale a profitable creativeproduct business with me, Catherine Erdly.
(01:57):
The Resilient Retail Game Plan isa podcast dedicated to one thing,
breaking down the concepts and toolsthat I've gathered from 20 years in
the retail industry and showing youhow you can use them in your business.
This is the real nuts and bolts ofrunning a successful product business,
broken down in an easy, accessible way.
This is not a podcast about learninghow to make your business look good.
(02:20):
It's the tools and techniques that willmake you and your business feel good.
Confidently plan, launch, and manageyour products, and feel in control of
your sales numbers and cash flow to helpyou build a resilient retail business.
(02:41):
So again, why do you need to havea clear idea of your numbers?
Well, I really believe that when peopletalk to me about their businesses, one of
the things that people will say is thatthey're really tired of winging things.
And for me, when people talk aboutwinging things, it usually is
this feeling of lack of control.
So, you may be running your businessby looking at how much is in your bank
(03:03):
account as opposed to having a clearcash flow plan, and it can feel very
much when you're in that situationwhere you don't have a clear plan or
clear idea of what you want to take.
It can feel very much like yourbusiness is happening to you.
So every day you are checking, right,what bills have I got going out?
Or you get that invoice comein that you have to pay.
You get that bill auto debitingout of your account and you
(03:26):
weren't quite expecting it.
Or you realize you need to place an orderwith your supplier, and that means a big
commitment to stock that you just didn'treally, you gotta kind of shuffle things
around or a tax bill, things like that.
So it can feel very unsettling and itcan feel very much like, as I said,
something that's happening to you.
And when you get into that situationwhere it's something that's happening
(03:48):
to you, you can start becoming muchmore reactive and less proactive.
So you are just reacting towhat's happening and you're
not taking control, seizing it.
And saying, right, this iswhat I think is gonna happen.
Let's put a plan in place and then let'slook at those key numbers and understand
where I'm at compared to my plan.
So the difference is going from feelinglike you're in that rollercoaster to
feeling like you're in the driving seat.
(04:09):
And that's what really knowingyour numbers is all about.
Not to mention that wingingit just gets really stressful.
Especially if you've got tight marginsor you've overstocked or you are got
big overheads that you have to meet.
You know, I always think about cashflow as being like a path that you
can walk through your business.
You need to walk through yourbusiness, and you need to weave
(04:30):
around the money coming in and themoney going out, and make sure that
you are staying on the right pathwithout running into too many pitfalls.
But if you don't have an idea of howmuch you're planning on having coming in
and how much you're planning on havinggoing out, then it just feels really
chaotic and it feels like you're tryingto walk a very narrow path blindfolded.
So having a data-driven business, or atleast knowing what key numbers to keep
(04:52):
an eye on can really make a difference.
So being really clear about your numberscan really make a big difference, and it
can make you feel much more in control.
It also means that when you're keepingan eye on the data in the business, it
allows you to make better decisions,whether that's decisions around
pricing, whether that's decisionsaround promotions that you wanna be
running, stock purchasing certainlyhelps you to make those decisions.
(05:13):
Hiring people, committingto costs, whatever it may be.
All of that is so much easier to doif you have got a really clear plan.
The best numbers, the business numbers,the reason I talk about this so much is
that I believe that good numbers giveyou insight before a problem escalates.
And it's the closest thing you're gonnaget in your business to a crystal ball.
You don't have to be a pro at finance,but you do need to understand the story
(05:37):
that your numbers are telling you andbe prepared to make some adjustments.
So what are the key numbersthat you need to know?
This is a question that I get asked a lot.
So what should you be keeping an eye on?
Well, firstly, I'm a big fanof keeping it super simple.
How much are you selling?
What were your sales in the first quarter?
You can break that down by month.
(05:57):
So what did you take in January versusFebruary versus March is so important
as business owners to get reallyclear on the seasonality of our sales.
Because once we really understand theseason and the rhythm of our business, it
makes it much easier for us to manage whensales fluctuate or we have quiet times.
Things that we otherwisemight not be expecting.
(06:20):
So make sure that you know what yoursales were quite simply for the last
quarter in January and February and March.
One of the traps that people fallinto is that because all of this
information is available in yourShopify dashboard or whatever it may be.
Or your Etsy dashboard or inyour point of sale system.
People tend to think, "oh, well I knowit because I've got it at my fingertips."
(06:41):
But the truth is a lot of the timepeople don't really look at it in much
detail or they don't really absorb it.
So quite often I'll be talking topeople who've got access to this
information and I'll say, "what wereyour sales last month?" And they
will have to go look it up, or theywon't have it very much top of mind.
So you want to knowwhat you took by month.
You want to know how that brokedown by your sales channels.
(07:02):
So if you're selling in storeonline or on Etsy, versus your
wholesale, versus your Shopifyversus whatever else it might be.
Know how those broke down.
Know how they're doing against the year.
Preferably, it's just an idea.
Which way are they trending?
And also just know what they were doingcompared to whatever goal you had.
(07:22):
So did you have a goalfor the first quarter?
How's it doing?
How's it going?
You also want to knowwithin that what is selling?
So what products are driving these sales?
It's always really important to know that.
Then your gross profit and your margins.
This is something that if you'redoing a quarterly review, it's a good
opportunity to do this every quarter.
If you're somebody who's got hundreds andhundreds of different products, this is
(07:43):
gonna feel like a really impossible task.
But if you've got a small productrange, you absolutely should be
looking at your margins once a quarter.
The best thing to do is get yourself amargin calculator spreadsheet set up.
So that you are able toinput all of your costs.
You know what the marginis on your product.
And then as things change, as someof the product of the cost of that
particular component goes up, you canadjust your margin spreadsheet so
(08:07):
that you are not in this situationwhere you're constantly having to
recalculate everything from zero.
So if you've got the book Tame YourTiger, then within the time your Tiger
Toolkit, there is a margin calculator.
If you're a member of the ResilientRetail Club, there's a margin
calculator inside there as well.
But you want to just checkthis at the very, very least.
If you're somebody who's got hundredsof products and you just think I
(08:28):
just don't have time every quarterto check your margins, just double
check that when you're placingorders for things, that is the best
time for you to check your margins.
What price are you being quoted?
How does that compare to the pricethat you're currently selling at?
Have you let some things slip wheremaybe the price has been increasing,
the cost price has been increasing, butyou haven't increased your retail price?
These are all really important things foryou to check, and really good for you to
(08:51):
do this exercise at least once a quarter.
Why does this matter?
Well, it's easy to sleepwalk into asituation where your profit margins are
shrinking, especially with costs rising.
We've been in a rising cost situationfor a couple of years now, and so it's
not unheard of for every time you placean order for something, the cost price
to be different of to increased, and itis definitely something that you need to
(09:13):
go over and you need to keep an eye on sothat you're not getting blindsided by it.
So making sure that you've got an ideaof what your margin is, what you are
currently placing at is really important.
Also, if you can get to it, and itdepends on where you're getting
your data from or how easy it is.
Ideally, you'd like to knowwhat is your actual out margin.
So your out margin is thereal final sales margin.
(09:36):
So for example, if you sell everythingat 20% off or 10% off because
you've got a welcome coupon code.
And so in fact you think you'reselling something for 45 pounds,
but you're not really, you'realways selling it at 10% off.
It's really important to calculatewhat your actual out margin
is at the end of the quarter.
So depending on your accountancysoftware, the way that you work with
(09:57):
your accountant, your bookkeeper.
You may be able to get this informationby looking at your net profit margin
where you've looked at your cost ofgoods sold versus your sales, but you
just need to double check that somecan sometimes be inaccurate if, for
example, you've bought stock at a certainpoint and it's reflected your purchase.
But not the actual cost ofgoods sold of your sold goods.
So if you can get your out margin,it isn't the easiest number to get.
(10:19):
But if you can, it's reallyhelpful to check that as well.
The reason for checking that is becausethat way you can really understand what
your actually, what your actual profitmargin is, and it's a good one to check.
If you can't check your outmargin, at least just double check
what your discount amount is.
So, for example, in Shopify, you can seehow much you've effectively been giving
away in discounts and just double checkit's not creeping up too much because that
(10:41):
can have a big impact on your bottom line.
As well as looking at yoursales and your margin.
I definitely recommendyou look at your stock.
So in an ideal world, you will havegone through and created yourself a
stock plan so you know what your stockis meant to be, your ideal stock.
If you don't know how much stockyou've got, then definitely recommend
taking the time to do a stock takeand work out how much stock you've
(11:03):
got 'cause it's a big indicator on howmuch cash is tied up in your business.
But if you've got a stock plan,then it's really good idea to keep
it updated on a monthly basis.
But once a quarter, maybego through, have a look.
Do you think you've got the rightnumber in there for your ideal stock?
What do you think?
Do you think you should maybe need a bitmore stock than you've currently got in
your plan, but maybe it feels a bit tight?
(11:25):
Or maybe you're feeling like you couldeven bring down your ideal stock a
bit more to try and reduce the amountof stock you're holding overall.
In terms of your sales plan and yourstock plan, it will have a sales plan
attached to it because that's how youcalculate the right amount of stock for
you is to have a sales plan as well.
If you've been overperforming orunderperforming your plan, you want to
adjust that as well so that you makesure that the future months, you're not
(11:47):
planning sales that are way outta whackwith how you're performing right now.
Which brings me back to sales.
So once you're looking at your sales,you want to know how am I doing?
How's it performing compared tomy plan compared to last year?
But you also really wannatry and understand why.
Why is it performing up or down?
Are there, for example, anyshifts in your average order
(12:08):
value or your conversion rate?
Those are good indicators.
Try and understandwhat's happening and why.
You know, when sales are really good,it's easy to kind of get caught up
in that and say, this is fantastic.
I love it.
Sales are up, but you wanna know why.
Is it because you're getting moretraffic from a certain channel?
Is it that people are spending more?
(12:28):
Is it that you've had certainproducts that have worked really well?
Whatever the position is, whateveryour numbers say, whether that's
positive or negative, you alwayswanna take the time to really dig in
and understand why that has happened.
Because that's how you learn,that's how you grow, that's how
you repeat those positive results.
So something else to look aton a quarterly basis is just
(12:48):
going over your cash flow.
So if you've got a cash flow planner.
If you haven't, and I highly recommendgetting yourself one, because it
really helps you, get to grips withwhat's going on in your business.
And really understand, are thereany crunch points coming up?
And also just helps you checkany decisions you might have,
whether that's a new hire or abig order or something like that.
(13:12):
Then going over your cash flow isreally important on a quarterly basis.
If you are an e-commerce business inparticular, I would be suggesting very
much that if you are spending money onads that you're looking at things like
your ROAS, your return on ad spend.
Your CAC, your cost of acquisition,your customer lifetime value.
Again, not the easiestthing to get your hands on.
(13:33):
Sometimes it depends on theplatform that you're using.
But if you can look at your customerlifetime value, basically what you
want to do is make sure that you aregetting a return on your ad spend.
That your ads are not costing you morethan you're actually generating in profit,
and that your cost of acquisition percustomer is not creeping up too much.
So these are all some reallygreat numbers for you to look at.
(13:55):
So sales.
But more importantly, what's driving it?
Profit margins, stock, cash flow,and then some of your metrics around
your cost of acquisition, your ROAS.
Also as well, things like, as Imentioned earlier, your average order
value is a really important number tolook at on an ongoing basis because
you want to always be looking to tryand push that, move that forward.
(14:17):
You don't want to sleepwalk againinto people purchasing things that
are lower value and that causesyou problems in the long run.
If your average order valuedrops and you also want to look at
things like your conversion rate.
If you're online, that'smuch easier to get to.
If you're in person, I do recommenddoing an exercise where you try
counting a number of people comingin versus your transactions.
(14:39):
It can be super useful just to reallyunderstand how things are going and
how your sales numbers are trending.
So how do we use Q2 asa bit of a reset button?
Again, as I mentioned, this is areally important point in the year.
You've put your plans into place, youhave set your focuses for the year,
(15:01):
you've started to see some results.
So what I would do is I wouldsuggest that you really delve
into what has worked, what didn'twork, and then where are the gaps.
So on a quarterly basis, it's greatto sit down and really have a look at
all of the things that worked well.
I like to split it into whatworked well and added value.
(15:21):
So what were things?
It could be products that worked well.
It could be social mediamarketing that worked well.
It could be your emails have picked up.
It could be the ads worked well.
It could be you had team memberreally slotted into place.
It could be that you, as the founderof actually being able to pay your
VAT bill without having to put moneyinto the business, for example.
(15:42):
Whatever it might be.
Make sure that you really capture whathas been working well, particularly again
as going back to any trading activities.
So products, marketing, promotions,like what's worked really well for you.
And so you can make notes andthen just ask yourself, do I
need to do more of this in Q2?
What have I currently got planned for Q2?
Do I want to do more of it?
(16:02):
Then you go back to what didn'twork well or could have been better.
It's really importantto capture that as well.
It could be products that youlaunched that didn't get a reaction.
It could be social media channels thatused to work really well for you that just
for some reason haven't been performing.
It could be a team memberthat was causing issues.
Whether it's that you need to lookto get more support, you didn't have
enough hours with them or whetherthey have a performance issue.
(16:25):
It could be questions about some ofthe partners you have in the business.
Your suppliers, your couriers,fulfillment center if you use one.
All of those sorts of things.
So just thinking about what, whereaboutscould I make some adjustments.
And using that list of things that maybedidn't work so well to identify the gaps.
So again, those gaps can be positive.
(16:45):
This worked really well,I want to do more of it.
Or it could be this didn't work,so actually I really need to
maybe not do that next time.
Let's say, for example, you had anew product launch, you launched
a new range of pink products.
Let's say you're a clothing brand and youhad a whole load of pink products that
came in in the early part of the yearand it just didn't really get a reaction.
(17:07):
And you weren't really sure, or maybeit was to do, you would still wanna
ask yourself questions like, whydon't, do I think it didn't work?
Is it, was it too early?
Is it actually gonna sell better now?
The weather's got warmer.
Is it something that justwas the wrong price point?
Is it something that justwasn't the right style?
So if you then think about that, youwould then look at your future launches
(17:29):
that you've got coming up and say, right.
Well, okay.
I think maybe it was the pricepoint more than anything.
Well, actually, I've got another launchcoming in, which is also a similar price
point, and now, I'm feeling a bit nervous.
Okay, I'm gonna make an adjustment.
I'm gonna see if it's possible toreduce that order or push it back,
or otherwise make some adjustments.
So really it's about looking atwhat your plan was for that quarter,
(17:53):
looking at what worked well, lookingat what didn't work well, using that
to identify the gaps and using thatto make adjustments moving forward.
So one of my mantras isinformation for action.
There's no point you spending hoursand hours combing over the stats
and making yourself a beautifulreport all about your first quarter.
If it's not actually gonna beanything you're gonna do anything
(18:13):
with, you're gonna be like, oh, okay.
Yes, my average transaction valuewas 27 pounds, 52 pence, right?
You know, that in itself is nota useful piece of information.
But if you say, my average transactionvalue was 27 pounds, 52, that's
actually up 10% from last year.
And this quarter I trieddoing some add-on products.
(18:35):
Okay, that's really interesting.
That seems to be having a positive effect.
Do I have any more add-onproducts planned for Q2?
No, I don't.
Okay, let me think about adding some in.
I need to find some,source them, bring them in.
So that's the kind of thing that Ithink is really powerful for a Q2.
Sort of Q1 reflection, Q2 planning,is you go over your broad plans
(18:56):
for Q2 and you sense check themin the light of how Q1 went.
So you would maybe adjust your stockbuys, maybe your marketing plans,
the things that worked really, reallywell that you haven't repeated.
So let's say you did a collaborationin January and it was brilliant.
You had such a good reaction to it.
People really loved it.
People responded to it.
It brought you lots of new followers.
(19:18):
But you don't actually have anothercollaboration planned in for Q2.
That is your signal to say,"Hmm, do you know what?
This didn't work really well.
This worked really wellin the first quarter.
I want to do more of this inthe second quarter." Right?
Who can I reach out to?
There's also looking atthe events that you had.
So for example, we've had Valentine's Day.
We've had, well, Mother's Day isshortly coming up, or you will have had
(19:41):
Mother's Day by the time this comes out.
So how did those go?
What worked really well?
And then what do you want to bringinto Easter if that's something
that's important for your business?
Father's Day, for example,what learnings would you have?
Could you apply from thoseseasonal events to the next
seasonal events that are coming?
You might wanna think aboutyour pricing strategy, people
(20:03):
responding to the products at theprice points that you expected.
Do you need to make any changesto your product selection?
Is there anything that you can do there?
Like what is working well?
What do you wanna do more of and whatisn't working and you wanna do less of?
And you wanna go over your plans for Q2?
It's not too late to hityour 2025 goals whatsoever.
2025 is really just gettinggoing, but it's great opportunity
(20:26):
to make that course correction.
And the key thing is not to buryyour head in the sand and just think,
oh, actually everything's great'cause I did better than I expected.
Or on the flip side, oh, everythingthings didn't quite work the way I
wanted them to in the first quarter.
So I'm going to just kindof bury my head in the sand.
You want to avoid burying your headin the sand as much as possible and
really try and gauge with what you are.
(20:47):
You are seeing because whether it'spositive performance or negative
performance, there's definitely gonnabe things that you can pull out and
adjust and make better going forward.
So make sure that you takethat opportunity to do that.
So what do you do if you feel overwhelmed?
So you might listened to this podcastand thought, " okay, this is great,
but I have so much going on, Ijust don't have the time to sit
(21:07):
down and go over the first quarter.
I just know I'm not gonna getto it and I'm just heading
straight into the second quarter."
That's absolutely fine.
You are not alone.
Lots of small businesses find it, notonly overwhelming to think about the
number side of things, but find itdifficult to just carve out the time.
So I'd say that thereis support out there.
We have our Stock Doctor service, which isdesigned for this, which is really there
(21:29):
to help you get a handle on your numberswith somebody who's a trained professional
coming in and looking at those for you.
You can also talk to your accountant.
Some accountants will offer aservice where they will actually
give you a bit of a rundown ofyour numbers on a monthly basis.
But at the very, very least,just have a look at your sales.
Even find one number to focus on,just how did you do in the second
(21:50):
quarter, and just set yourself a timer.
Sit down, set a timer on your phonefor 20 minutes, 15 minutes even.
Sit down, look at what you tookin terms of sales in the first
quarter compared to last year.
If you can get it, your plan, andthen just think about the top three
things that you do differently.
Or the top three things youwanna make sure you absolutely
do hit for the second quarter.
(22:11):
And that can be enough.
It's better to do that than to completelydisengage from the numbers altogether
because you find it really overwhelming.
Set yourself a timer.
Set yourself a goal.
And to just go through what happenedin the first quarter and note down
some thoughts for the second quarter.
So there you go, I would love toencourage you to block some time out
this week to look at your Q1 numbers.
(22:32):
If you've got any questions,then do drop me a message on
Instagram @resilientretailclub.
I'd love to hear your questionsand hear how you found that.
Set yourself a goal or look at your Q2goals and decide are they realistic or
do you want to make any adjustments?
And are there any major things that you'dlike to adjust in terms of your plans for
your marketing, and so on and so forth.
Don't worry, you've got this.
Everybody finds it overwhelming, but themore that you take the time to sit down
(22:55):
and look at things like this, go througha quarterly plan like this, then the
more easy it will feel in the long run.
Do come say hi on Instagram@resilientretailclub.
Don't forget to like, follow, orsubscribe the podcast wherever you
listen to your podcast and you'll be thefirst to know about each new episode.
Until next week, see you then.
It is April, which means that we arein the start of the second quarter.
(00:04):
Can you believe that the first quarterof this year has already gone past?
Hi everybody, it's Catherine Erdly.
I'm your host today as well as thefounder of the Resilient Retail Club.
That is my membership group, mastermind,and done for you services for retailers.
Head over to resilientretailclub.comto find out more.
So today I wanted to talk toyou all about the second quarter
(00:27):
and specifically knowing yournumbers for the quarter ahead.
So why is it so important for youto get a handle on your numbers?
Well, this is the perfect time for youto get a fresh look at your numbers and
to start thinking about how you've beenperforming in the first quarter, what
you want to do in the second quarter, andthen basically making any adjustments.
(00:49):
Now, I know not everybody's businessis centered around Christmas,
but for a lot of people it is.
And if it's not Christmas, thenyou might get a bit of a bump
for back to school in September.
Some people, obviously their peakis coming up in the summer, but for
a lot of people the second quarteris a little bit quieter or maybe
(01:09):
not like a full on sales quarter.
And so for a lot of people, this isthe perfect time to be spending a bit
more time looking at your business.
And the way I like to think about thesecond quarter is that you hopefully
put your plan in place for the year.
You've now seen the resultsof that in the first quarter.
You can then kind of look at that, adjust,make some plans for the second quarter.
(01:31):
And then also into the year ahead.
What I'm gonna be talking about is thenumbers that matter, the metrics that
you should be tracking, and then how touse that to plan out the next 90 days.
Welcome to the Resilient Retail GamePlan, a podcast for anyone wanting to
start, grow or scale a profitable creativeproduct business with me, Catherine Erdly.
(01:57):
The Resilient Retail Game Plan isa podcast dedicated to one thing,
breaking down the concepts and toolsthat I've gathered from 20 years in
the retail industry and showing youhow you can use them in your business.
This is the real nuts and bolts ofrunning a successful product business,
broken down in an easy, accessible way.
This is not a podcast about learninghow to make your business look good.
(02:20):
It's the tools and techniques that willmake you and your business feel good.
Confidently plan, launch, and manageyour products, and feel in control of
your sales numbers and cash flow to helpyou build a resilient retail business.
(02:41):
So again, why do you need to havea clear idea of your numbers?
Well, I really believe that when peopletalk to me about their businesses, one of
the things that people will say is thatthey're really tired of winging things.
And for me, when people talk aboutwinging things, it usually is
this feeling of lack of control.
So, you may be running your businessby looking at how much is in your bank
(03:03):
account as opposed to having a clearcash flow plan, and it can feel very
much when you're in that situationwhere you don't have a clear plan or
clear idea of what you want to take.
It can feel very much like yourbusiness is happening to you.
So every day you are checking, right,what bills have I got going out?
Or you get that invoice comein that you have to pay.
You get that bill auto debitingout of your account and you
(03:26):
weren't quite expecting it.
Or you realize you need to place an orderwith your supplier, and that means a big
commitment to stock that you just didn'treally, you gotta kind of shuffle things
around or a tax bill, things like that.
So it can feel very unsettling and itcan feel very much like, as I said,
something that's happening to you.
And when you get into that situationwhere it's something that's happening
(03:48):
to you, you can start becoming muchmore reactive and less proactive.
So you are just reacting towhat's happening and you're
not taking control, seizing it.
And saying, right, this iswhat I think is gonna happen.
Let's put a plan in place and then let'slook at those key numbers and understand
where I'm at compared to my plan.
So the difference is going from feelinglike you're in that rollercoaster to
feeling like you're in the driving seat.
(04:09):
And that's what really knowingyour numbers is all about.
Not to mention that wingingit just gets really stressful.
Especially if you've got tight marginsor you've overstocked or you are got
big overheads that you have to meet.
You know, I always think about cashflow as being like a path that you
can walk through your business.
You need to walk through yourbusiness, and you need to weave
(04:30):
around the money coming in and themoney going out, and make sure that
you are staying on the right pathwithout running into too many pitfalls.
But if you don't have an idea of howmuch you're planning on having coming in
and how much you're planning on havinggoing out, then it just feels really
chaotic and it feels like you're tryingto walk a very narrow path blindfolded.
So having a data-driven business, or atleast knowing what key numbers to keep
(04:52):
an eye on can really make a difference.
So being really clear about your numberscan really make a big difference, and it
can make you feel much more in control.
It also means that when you're keepingan eye on the data in the business, it
allows you to make better decisions,whether that's decisions around
pricing, whether that's decisionsaround promotions that you wanna be
running, stock purchasing certainlyhelps you to make those decisions.
(05:13):
Hiring people, committingto costs, whatever it may be.
All of that is so much easier to doif you have got a really clear plan.
The best numbers, the business numbers,the reason I talk about this so much is
that I believe that good numbers giveyou insight before a problem escalates.
And it's the closest thing you're gonnaget in your business to a crystal ball.
You don't have to be a pro at finance,but you do need to understand the story
(05:37):
that your numbers are telling you andbe prepared to make some adjustments.
So what are the key numbersthat you need to know?
This is a question that I get asked a lot.
So what should you be keeping an eye on?
Well, firstly, I'm a big fanof keeping it super simple.
How much are you selling?
What were your sales in the first quarter?
You can break that down by month.
(05:57):
So what did you take in January versusFebruary versus March is so important
as business owners to get reallyclear on the seasonality of our sales.
Because once we really understand theseason and the rhythm of our business, it
makes it much easier for us to manage whensales fluctuate or we have quiet times.
Things that we otherwisemight not be expecting.
(06:20):
So make sure that you know what yoursales were quite simply for the last
quarter in January and February and March.
One of the traps that people fallinto is that because all of this
information is available in yourShopify dashboard or whatever it may be.
Or your Etsy dashboard or inyour point of sale system.
People tend to think, "oh, well I knowit because I've got it at my fingertips."
(06:41):
But the truth is a lot of the timepeople don't really look at it in much
detail or they don't really absorb it.
So quite often I'll be talking topeople who've got access to this
information and I'll say, "what wereyour sales last month?" And they
will have to go look it up, or theywon't have it very much top of mind.
So you want to knowwhat you took by month.
You want to know how that brokedown by your sales channels.
(07:02):
So if you're selling in storeonline or on Etsy, versus your
wholesale, versus your Shopifyversus whatever else it might be.
Know how those broke down.
Know how they're doing against the year.
Preferably, it's just an idea.
Which way are they trending?
And also just know what they were doingcompared to whatever goal you had.
(07:22):
So did you have a goalfor the first quarter?
How's it doing?
How's it going?
You also want to knowwithin that what is selling?
So what products are driving these sales?
It's always really important to know that.
Then your gross profit and your margins.
This is something that if you'redoing a quarterly review, it's a good
opportunity to do this every quarter.
If you're somebody who's got hundreds andhundreds of different products, this is
(07:43):
gonna feel like a really impossible task.
But if you've got a small productrange, you absolutely should be
looking at your margins once a quarter.
The best thing to do is get yourself amargin calculator spreadsheet set up.
So that you are able toinput all of your costs.
You know what the marginis on your product.
And then as things change, as someof the product of the cost of that
particular component goes up, you canadjust your margin spreadsheet so
(08:07):
that you are not in this situationwhere you're constantly having to
recalculate everything from zero.
So if you've got the book Tame YourTiger, then within the time your Tiger
Toolkit, there is a margin calculator.
If you're a member of the ResilientRetail Club, there's a margin
calculator inside there as well.
But you want to just checkthis at the very, very least.
If you're somebody who's got hundredsof products and you just think I
(08:28):
just don't have time every quarterto check your margins, just double
check that when you're placingorders for things, that is the best
time for you to check your margins.
What price are you being quoted?
How does that compare to the pricethat you're currently selling at?
Have you let some things slip wheremaybe the price has been increasing,
the cost price has been increasing, butyou haven't increased your retail price?
These are all really important things foryou to check, and really good for you to
(08:51):
do this exercise at least once a quarter.
Why does this matter?
Well, it's easy to sleepwalk into asituation where your profit margins are
shrinking, especially with costs rising.
We've been in a rising cost situationfor a couple of years now, and so it's
not unheard of for every time you placean order for something, the cost price
to be different of to increased, and itis definitely something that you need to
(09:13):
go over and you need to keep an eye on sothat you're not getting blindsided by it.
So making sure that you've got an ideaof what your margin is, what you are
currently placing at is really important.
Also, if you can get to it, and itdepends on where you're getting
your data from or how easy it is.
Ideally, you'd like to knowwhat is your actual out margin.
So your out margin is thereal final sales margin.
(09:36):
So for example, if you sell everythingat 20% off or 10% off because
you've got a welcome coupon code.
And so in fact you think you'reselling something for 45 pounds,
but you're not really, you'realways selling it at 10% off.
It's really important to calculatewhat your actual out margin
is at the end of the quarter.
So depending on your accountancysoftware, the way that you work with
(09:57):
your accountant, your bookkeeper.
You may be able to get this informationby looking at your net profit margin
where you've looked at your cost ofgoods sold versus your sales, but you
just need to double check that somecan sometimes be inaccurate if, for
example, you've bought stock at a certainpoint and it's reflected your purchase.
But not the actual cost ofgoods sold of your sold goods.
So if you can get your out margin,it isn't the easiest number to get.
(10:19):
But if you can, it's reallyhelpful to check that as well.
The reason for checking that is becausethat way you can really understand what
your actually, what your actual profitmargin is, and it's a good one to check.
If you can't check your outmargin, at least just double check
what your discount amount is.
So, for example, in Shopify, you can seehow much you've effectively been giving
away in discounts and just double checkit's not creeping up too much because that
(10:41):
can have a big impact on your bottom line.
As well as looking at yoursales and your margin.
I definitely recommendyou look at your stock.
So in an ideal world, you will havegone through and created yourself a
stock plan so you know what your stockis meant to be, your ideal stock.
If you don't know how much stockyou've got, then definitely recommend
taking the time to do a stock takeand work out how much stock you've
(11:03):
got 'cause it's a big indicator on howmuch cash is tied up in your business.
But if you've got a stock plan,then it's really good idea to keep
it updated on a monthly basis.
But once a quarter, maybego through, have a look.
Do you think you've got the rightnumber in there for your ideal stock?
What do you think?
Do you think you should maybe need a bitmore stock than you've currently got in
your plan, but maybe it feels a bit tight?
(11:25):
Or maybe you're feeling like you couldeven bring down your ideal stock a
bit more to try and reduce the amountof stock you're holding overall.
In terms of your sales plan and yourstock plan, it will have a sales plan
attached to it because that's how youcalculate the right amount of stock for
you is to have a sales plan as well.
If you've been overperforming orunderperforming your plan, you want to
adjust that as well so that you makesure that the future months, you're not
(11:47):
planning sales that are way outta whackwith how you're performing right now.
Which brings me back to sales.
So once you're looking at your sales,you want to know how am I doing?
How's it performing compared tomy plan compared to last year?
But you also really wannatry and understand why.
Why is it performing up or down?
Are there, for example, anyshifts in your average order
(12:08):
value or your conversion rate?
Those are good indicators.
Try and understandwhat's happening and why.
You know, when sales are really good,it's easy to kind of get caught up
in that and say, this is fantastic.
I love it.
Sales are up, but you wanna know why.
Is it because you're getting moretraffic from a certain channel?
Is it that people are spending more?
(12:28):
Is it that you've had certainproducts that have worked really well?
Whatever the position is, whateveryour numbers say, whether that's
positive or negative, you alwayswanna take the time to really dig in
and understand why that has happened.
Because that's how you learn,that's how you grow, that's how
you repeat those positive results.
So something else to look aton a quarterly basis is just
(12:48):
going over your cash flow.
So if you've got a cash flow planner.
If you haven't, and I highly recommendgetting yourself one, because it
really helps you, get to grips withwhat's going on in your business.
And really understand, are thereany crunch points coming up?
And also just helps you checkany decisions you might have,
whether that's a new hire or abig order or something like that.
(13:12):
Then going over your cash flow isreally important on a quarterly basis.
If you are an e-commerce business inparticular, I would be suggesting very
much that if you are spending money onads that you're looking at things like
your ROAS, your return on ad spend.
Your CAC, your cost of acquisition,your customer lifetime value.
Again, not the easiestthing to get your hands on.
(13:33):
Sometimes it depends on theplatform that you're using.
But if you can look at your customerlifetime value, basically what you
want to do is make sure that you aregetting a return on your ad spend.
That your ads are not costing you morethan you're actually generating in profit,
and that your cost of acquisition percustomer is not creeping up too much.
So these are all some reallygreat numbers for you to look at.
(13:55):
So sales.
But more importantly, what's driving it?
Profit margins, stock, cash flow,and then some of your metrics around
your cost of acquisition, your ROAS.
Also as well, things like, as Imentioned earlier, your average order
value is a really important number tolook at on an ongoing basis because
you want to always be looking to tryand push that, move that forward.
(14:17):
You don't want to sleepwalk againinto people purchasing things that
are lower value and that causesyou problems in the long run.
If your average order valuedrops and you also want to look at
things like your conversion rate.
If you're online, that'smuch easier to get to.
If you're in person, I do recommenddoing an exercise where you try
counting a number of people comingin versus your transactions.
(14:39):
It can be super useful just to reallyunderstand how things are going and
how your sales numbers are trending.
So how do we use Q2 asa bit of a reset button?
Again, as I mentioned, this is areally important point in the year.
You've put your plans into place, youhave set your focuses for the year,
(15:01):
you've started to see some results.
So what I would do is I wouldsuggest that you really delve
into what has worked, what didn'twork, and then where are the gaps.
So on a quarterly basis, it's greatto sit down and really have a look at
all of the things that worked well.
I like to split it into whatworked well and added value.
(15:21):
So what were things?
It could be products that worked well.
It could be social mediamarketing that worked well.
It could be your emails have picked up.
It could be the ads worked well.
It could be you had team memberreally slotted into place.
It could be that you, as the founderof actually being able to pay your
VAT bill without having to put moneyinto the business, for example.
(15:42):
Whatever it might be.
Make sure that you really capture whathas been working well, particularly again
as going back to any trading activities.
So products, marketing, promotions,like what's worked really well for you.
And so you can make notes andthen just ask yourself, do I
need to do more of this in Q2?
What have I currently got planned for Q2?
Do I want to do more of it?
(16:02):
Then you go back to what didn'twork well or could have been better.
It's really importantto capture that as well.
It could be products that youlaunched that didn't get a reaction.
It could be social media channels thatused to work really well for you that just
for some reason haven't been performing.
It could be a team memberthat was causing issues.
Whether it's that you need to lookto get more support, you didn't have
enough hours with them or whetherthey have a performance issue.
(16:25):
It could be questions about some ofthe partners you have in the business.
Your suppliers, your couriers,fulfillment center if you use one.
All of those sorts of things.
So just thinking about what, whereaboutscould I make some adjustments.
And using that list of things that maybedidn't work so well to identify the gaps.
So again, those gaps can be positive.
(16:45):
This worked really well,I want to do more of it.
Or it could be this didn't work,so actually I really need to
maybe not do that next time.
Let's say, for example, you had anew product launch, you launched
a new range of pink products.
Let's say you're a clothing brand and youhad a whole load of pink products that
came in in the early part of the yearand it just didn't really get a reaction.
(17:07):
And you weren't really sure, or maybeit was to do, you would still wanna
ask yourself questions like, whydon't, do I think it didn't work?
Is it, was it too early?
Is it actually gonna sell better now?
The weather's got warmer.
Is it something that justwas the wrong price point?
Is it something that justwasn't the right style?
So if you then think about that, youwould then look at your future launches
(17:29):
that you've got coming up and say, right.
Well, okay.
I think maybe it was the pricepoint more than anything.
Well, actually, I've got another launchcoming in, which is also a similar price
point, and now, I'm feeling a bit nervous.
Okay, I'm gonna make an adjustment.
I'm gonna see if it's possible toreduce that order or push it back,
or otherwise make some adjustments.
So really it's about looking atwhat your plan was for that quarter,
(17:53):
looking at what worked well, lookingat what didn't work well, using that
to identify the gaps and using thatto make adjustments moving forward.
So one of my mantras isinformation for action.
There's no point you spending hoursand hours combing over the stats
and making yourself a beautifulreport all about your first quarter.
If it's not actually gonna beanything you're gonna do anything
(18:13):
with, you're gonna be like, oh, okay.
Yes, my average transaction valuewas 27 pounds, 52 pence, right?
You know, that in itself is nota useful piece of information.
But if you say, my average transactionvalue was 27 pounds, 52, that's
actually up 10% from last year.
And this quarter I trieddoing some add-on products.
(18:35):
Okay, that's really interesting.
That seems to be having a positive effect.
Do I have any more add-onproducts planned for Q2?
No, I don't.
Okay, let me think about adding some in.
I need to find some,source them, bring them in.
So that's the kind of thing that Ithink is really powerful for a Q2.
Sort of Q1 reflection, Q2 planning,is you go over your broad plans
(18:56):
for Q2 and you sense check themin the light of how Q1 went.
So you would maybe adjust your stockbuys, maybe your marketing plans,
the things that worked really, reallywell that you haven't repeated.
So let's say you did a collaborationin January and it was brilliant.
You had such a good reaction to it.
People really loved it.
People responded to it.
It brought you lots of new followers.
(19:18):
But you don't actually have anothercollaboration planned in for Q2.
That is your signal to say,"Hmm, do you know what?
This didn't work really well.
This worked really wellin the first quarter.
I want to do more of this inthe second quarter." Right?
Who can I reach out to?
There's also looking atthe events that you had.
So for example, we've had Valentine's Day.
We've had, well, Mother's Day isshortly coming up, or you will have had
(19:41):
Mother's Day by the time this comes out.
So how did those go?
What worked really well?
And then what do you want to bringinto Easter if that's something
that's important for your business?
Father's Day, for example,what learnings would you have?
Could you apply from thoseseasonal events to the next
seasonal events that are coming?
You might wanna think aboutyour pricing strategy, people
(20:03):
responding to the products at theprice points that you expected.
Do you need to make any changesto your product selection?
Is there anything that you can do there?
Like what is working well?
What do you wanna do more of and whatisn't working and you wanna do less of?
And you wanna go over your plans for Q2?
It's not too late to hityour 2025 goals whatsoever.
2025 is really just gettinggoing, but it's great opportunity
(20:26):
to make that course correction.
And the key thing is not to buryyour head in the sand and just think,
oh, actually everything's great'cause I did better than I expected.
Or on the flip side, oh, everythingthings didn't quite work the way I
wanted them to in the first quarter.
So I'm going to just kindof bury my head in the sand.
You want to avoid burying your headin the sand as much as possible and
really try and gauge with what you are.
(20:47):
You are seeing because whether it'spositive performance or negative
performance, there's definitely gonnabe things that you can pull out and
adjust and make better going forward.
So make sure that you takethat opportunity to do that.
So what do you do if you feel overwhelmed?
So you might listened to this podcastand thought, " okay, this is great,
but I have so much going on, Ijust don't have the time to sit
(21:07):
down and go over the first quarter.
I just know I'm not gonna getto it and I'm just heading
straight into the second quarter."
That's absolutely fine.
You are not alone.
Lots of small businesses find it, notonly overwhelming to think about the
number side of things, but find itdifficult to just carve out the time.
So I'd say that thereis support out there.
We have our Stock Doctor service, which isdesigned for this, which is really there
(21:29):
to help you get a handle on your numberswith somebody who's a trained professional
coming in and looking at those for you.
You can also talk to your accountant.
Some accountants will offer aservice where they will actually
give you a bit of a rundown ofyour numbers on a monthly basis.
But at the very, very least,just have a look at your sales.
Even find one number to focus on,just how did you do in the second
(21:50):
quarter, and just set yourself a timer.
Sit down, set a timer on your phonefor 20 minutes, 15 minutes even.
Sit down, look at what you tookin terms of sales in the first
quarter compared to last year.
If you can get it, your plan, andthen just think about the top three
things that you do differently.
Or the top three things youwanna make sure you absolutely
do hit for the second quarter.
(22:11):
And that can be enough.
It's better to do that than to completelydisengage from the numbers altogether
because you find it really overwhelming.
Set yourself a timer.
Set yourself a goal.
And to just go through what happenedin the first quarter and note down
some thoughts for the second quarter.
So there you go, I would love toencourage you to block some time out
this week to look at your Q1 numbers.
(22:32):
If you've got any questions,then do drop me a message on
Instagram @resilientretailclub.
I'd love to hear your questionsand hear how you found that.
Set yourself a goal or look at your Q2goals and decide are they realistic or
do you want to make any adjustments?
And are there any major things that you'dlike to adjust in terms of your plans for
your marketing, and so on and so forth.
Don't worry, you've got this.
Everybody finds it overwhelming, but themore that you take the time to sit down
(22:55):
and look at things like this, go througha quarterly plan like this, then the
more easy it will feel in the long run.
Do come say hi on Instagram@resilientretailclub.
Don't forget to like, follow, orsubscribe the podcast wherever you
listen to your podcast and you'll be thefirst to know about each new episode.
Until next week, see you then.
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