Although this recent article on making money in the wine business is focused on vineyard owners, its lessons apply to the retail side of the business, as well. [level-members]
At its simplest, sorting out the profitability – and sustainability – of your retail wine shop comes down to knowing three things:
- Your Costs
- Your Margins
- Your Volume
But knowing that your margins x your sales volume minus your costs tells you whether you’re staying in business or shutting the doors is only the beginning. Your margins aren’t the same across all bottles. Neither is your volume? A spreadsheet can help you track your business’ strengths and weaknesses and find the best way to optimize your profitability.
The article provides additional hints, though you’re going to have to put in the time to create a version that works for you. We’ve never found a spreadsheet that was universally applicable, even within the same industry.
Put the time into learning how to use this foundational business tool. You’ll learn a lot from your first attempt – and more as you create more revealing windows into what makes your business tick. [/level-members]