1. The Pareto Principle _ Using spreadsheet tracking, you can easily apply the Pareto principle in deciding which of your income sources and expense channels(i.e. products and services sales) to focus on in order to maximize profits. Considering that you are most likely to use the same marketing/sales resources to serve your customers, it only follows that if you focus on your biggest margin selling products/services, you will get increased profits at more or less the same cost.
In my article titled You Can Increase Your Profits Without Changing Your Prices, I ended with the following summary: If You Remember Nothing Else, Remember The Following: 1. One good way to maintain and/or significantly increase your profits without raising your prices, is to reduce your Variable Costs(VCs). 2. You can reduce your variable costs by marketing more efficiently (getting more customers at lesser cost, AND maintaining them at lower expense). I once read an article that proposed a new parameter COCS: Cost Of Customers Sold or Served). This could be adopted as a Key Performance Indicator(KPI). 3. You can also reduce your variable costs by innovating more(i.e. developing greater efficiency in your routine internal operations and/or product/service delivery). That way, you would be able to produce/deliver more products and/or services with less effort, in less time, and using less resources. All of these would imply LOWER expenses/costs, leading to INCREASED profit retention per unit of product/service sold. 4. There is saying that: "You cannot manage something, if you do not measure it. Nor can you measure it, if you do not record it". Spreadsheet tracking will help you conveniently implement and sustain the process of monitoring, controlling and/or reducing your VCs. You will need to do this so as to constantly evaluate progress of your VC monitoring/control and reduction initiatives.
One Possible Application: Plotting a pie chart based on income contributions from all your products and services(daily, weekly or monthly), and reviewing the automatically computed percentages/visual pie slices, can give very illuminating insight.
To elaborate further: A one_page Variable Costs Analysis report sheet automatically generated by the custom spreadsheet application I earlier described, was a powerful tool used by top management to quickly assess performances of individual breweries. Among other benefits, the report made it quite easy to realistically compare sister breweries in different locations(even across countries) based on common denominators. Apart from summarising brewing/packaging materials in two groups _
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