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Cost of Sales Calculation - Some Simple Steps That Can Increase Your Sales featured image

Calculating Sales – Some Simple Steps That Can Increase Your Profits

Calculating sales revenue is important to businesses. Many first time small business owners do not know how to properly calculate the revenue for the business. This is a huge mistake many small business owners make. If you are a business owner, there are some tips that will help you figure out how to calculate your sales.

Sales Revenue 

How many units sold will make up your sales revenue. If your calculated sales revenue falls, it can affect your business in more ways than one. You can either cut expenses, close down, or worst of all lose your license to operate. If your revenue decreases, you may also get into trouble with the government. You can get into debt because the decrease in sales revenue can cause your business to run at a loss. Obviously, too much of that leads to some unsavoury situations. 

If the sales fall lower than your target, you can negotiate with the salespeople to bring your prices up or introduce a new offering. 


Expand Your Offering 

To calculate the sales revenue you need and should expect, you need to figure out how many units are sold every day. Take note of how many sales you made during the month. These will help you determine how much revenue you should expect over time. 

The next thing that you need to do is analyse the market. You have to know what kind of products and services your target audience is looking for. If you need a wide variety of products in your store, then you have to make sure that you can provide. If you only offer one specific product and aren’t flexible, then your customers will eventually go elsewhere to find a product that they are looking for.

Another thing that you need to consider when you are calculating your target market is the competition. If the competition is tough, then you need to adjust the cost and price of your products. So that your prices are competitive. Making them more affordable to your target market.

Learn Your Niche 

The last thing that you need to do is to learn how to target. You have to know which customers are looking for certain products. So you can then provide the products that can satisfy their needs. Create customer avatars that increase your ROI. These customers are what make your business profitable. After calculating the sales of a certain product or service and comparing each one you’ll be able to see what your niche truly is. When you have a key niche and you are dominating that niche the profits will speak for themselves.


As long as you can calculate your sales revenue properly, you can understand what it takes to make your business profitable. You will not have to worry all the time about your monthly expenses. Just ensure that you know how to properly calculate sales revenue so that you will be able to have an accurate picture of what you are getting in return for your investment.

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