Every Question Should Lead to a Service Engagement
Business Advisory Services Updates
Now is the time for accountants to be having a cup of coffee with SME clients to help set the business’ strategic plan for 2021.
Some of the questions that you could ask include:
- What are your top 5 sales lines?
- What mark-ups do you make from these products?
- What are your bottom 5 sales lines?
- What mark-ups do you make from these products?
- Do your team members know the composition of your stock so that they could identify:
- “Star Products” – these are the items that you sell a lot of and have a high mark-up?
- “Cash Cows” – these are the items that you sell a lot of that have a low markup?
- “Problem Lines” – low sales but reasonable mark-ups?
- “Dogs” – low sales with low mark-ups? You probably should be avoiding purchasing these items in the first place.
Do you know what your “lock-up” is? (The number of days from the time that you paid for the stock until you get paid for it).
The engagement from these questions would relate to a retail analysis evaluating the product mix and targeted mark-ups – will these generate enough gross profit for the business to trade profitably?
