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Small Business Management Tool

Problem:
 

A small business was facing difficulty understanding why it wasn’t profitable despite generating regular sales. The owners struggled to identify key areas of inefficiency, and lacked a comprehensive overview of their profit margins, operating expenses, and inventory management, making it hard to pinpoint the source of the problem.
 

Solution:


With limited resources and access only to Excel 2016, we developed a custom spreadsheet designed to help the business gain deeper insights into its financial performance. The tool included the following key features:
 

  • Profit margin calculations: Automatically calculated the Gross Profit Margin, Operating Margin, and Net Profit Margin, providing a clear understanding of profitability at different levels.
     

  • Break-even analysis: A monthly break-even point calculation to help the business determine how much it needed to sell each month to cover its costs.
     

  • Inventory tracking: Included templates to calculate both inventory value and current stock value, allowing the business to keep track of its assets and inventory turnover.
     

  • Automated sales and cost tracking: Monthly templates that captured sales and costs, with automatic calculations of Gross Profit, Operating Profit, Net Profit, and Cash Flow.
     

  • Expense tracking: A dedicated template for tracking card and cash usage, detailing where money was being spent, to help the business manage its finances more effectively.
     

  • Visual analytics: Built-in graphs to visually represent monthly growth and financial performance over a year, helping the business identify trends and make informed decisions.
     

    • Tools Used:

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  • Microsoft Excel 2016

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    Results:


    The tool provided critical insights that led to major operational changes:

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  • The business was able to identify cost inefficiencies, reducing spending on items that did not add value to the bottom line.

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  • They shifted focus towards higher-margin products, improving overall profitability.

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  • The automated processes simplified financial tracking, allowing the business to make more informed decisions and better manage cash flow.

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  • The visual representation of their finances helped the business owner better understand their growth trajectory and plan more effectively for the future.

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