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Oh, studio owners. I want to take a moment to reintroduce you to one of our favorite tools that can really put some impact and some focus behind your progress in your goals. Each of you has access to our special sauce through Fathom. Fathom is a key performance indicator reporting system and that we use to look at your studio, compare it to industry standards, can compare it to its past performance and also compare it to other studios that we work with. When you log into Fathom, you’ll have access to a variety of tools there, a lot of tools. Now I understand you’re not going to use all of them, but I want you to be familiar with some of the top things that you can be looking at. If you had 5 or 10 minutes in a quick glance, what should you be checking out each month and watching for when you’re doing your analysis and looking at your goals. So first off, if you go to Fathomhq.com, you can log in.
Just go to our website at pypaccounting.com and then the upper right corner. Click on client tools and you’ll see the login there directly that will take you to Fathom. Okay, so once you log into Fathom, you’re going to see your particular studio showing up. You’re going to have access to analysis reports and of course the settings. I don’t think you’ll need anything in the settings and also down the left hand side you’ve got a little menu that is probably hidden away that has some interesting things, but the first screen that you will come to our KPIs, KPI stands for key performance indicators. These are like looking at your dashboard in your car to know how quickly you’re going, how your oil pressure is, how much gas you have. These are your same statistics for your dashboard of your studio. Now each of these is customized. We ask for your square footage, how many hours you’re open and your seating capacity.
If ever any of those things change, please let me know and I’ll update it here in the software so that your comparisons will be valid. But I’m going to have to let you take a look. This is a result looking at January of 2020 and the trend here is showing you versus a target. We can also update that and change that to compare it. Oops, sorry to last month or I’m sorry, the same month and last year. So we can also do a comparison and I think that’s a really nice comparison that people like to look at to see how they’re doing in comparison to the previous year and seasonality effects in place. Okay, so you can flip that over. You can also change the month or changes over the year or quarter if you want to do some comparisons, but I’ll draw your attention to section B, the PYOP indicators. These are the indicators that we watch for every studio.
We’re looking at your revenue per square foot, per seat, per hour that you’re open. Very important looking at your payroll, cost of goods sold and advertising. These three indicators if I had to point you to some quick number to look at. These are the places when you click on one of these indicators, you will go in and see the detail and this is going to show you the amount for your percentage of payroll each month in the past year, assuming you’ve been on the ride with us for that whole year. You can look at those percentages and see where you’re at. And this looks very normal. If you look we can’t fire everybody. When we come to a slower time of the year and obviously in December we’re going to dip below our industry standards hopefully because we’re so busy that our people are being used in the proper manner and we need less labor as a percentage of our revenue.
Okay. When you look at any of these indicators, you will see here payroll percentage equals payroll divided by revenue times 100. If you click the expand formula, you’ll be able to see your specific numbers substituted into that formula. You’ll also see a rolling average that’s for I like the look is not just once a month cause I can go up and down. But where are you over a 12 month period. As you can see, this studio is over its target, it’s target would be 20% and it’s running about 26%. So here we have a little bit of a labor problem. However, when we compare this down in the bottom, this is comparing you to your peers. So that percentage for the month of January was not really that bad. So that 25%, that’s a right smack dab in the middle of where studios are for the month of January. Again, these take into account the seasonalities when we’re comparing them to other studios performance.
All right? You can also look at your total revenue, your gross profit margin anywhere you see the red dot. These are areas of concern. So for example, the gross profit margin, we really want to see you be at about 82% as our target here. Operating here a little bit lower than usual. Okay, so again any of these that you have questions about, you may click on them and see the numbers in specific format. You can also scroll down. Also take a look at your inventory days. How quickly are you turning your inventory? Our goal here is 30 days hopefully, but a lot 60 days is acceptable, 30 days is really the target. We want to be rolling that inventory in and out so you’re not visiting your money on the shelves every day. When you click back on the left-hand side, there are a number of tools here.
I’m not going to go through all of them for you, but try them out, look at them and see how things are going. So for example, here I can plug in my labor or my revenue versus my cost of goods sold and look at them comparatively on a chart. I can see the detail of all of the numbers for that period. I can go back as far back as you go back with us. You can do a comparison, so here is showing you over about six years in particular for this one. So some great stat, statistical information, very interactive with graphing and looking at where you’re at. You can also look at your break-even points and drag and drop here. You’ll see that this information is all dynamically changing. When you utilize the app, every one of you gets a report on the 20th of the month that shows your studio’s performance.
That is a static copy of that report, so if you want to pull that out, if you’re going to be somewhere where you’re not going to have internet access or where you want to look at this in a paper format, that’s a good alternative for you. You can look at that at any point. Also, if you run across any of these charge that you say, man, I want to print that out. I wish I could look at that and take it with me and the bottom left-hand corner, you can download any screenshot that you see here. This will download a static report for you that you could print out, post on the wall, look at, do some analysis later on. You also can see all of your financials. This is in a summary format, but you can flip it over and see all of the detail here as well. So take a look. Use these tools if you have questions about how to use them, what to look at, something that you’re seeing that you don’t quite understand. I’m here for you to help you with those numbers. So take a look, let me know what you think. I think this could be a really valuable tool for you to use to grow your studio. Thank you and have a fantastic day.
Donna Bordeaux, CPA with PYOPAccounting.com.
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna Bordeaux and PYOP Accounting.com. Donna and her husband, Chad, who is also a CPA, have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help PYOP studios earn 4 times more profit than the average PYOP and are passionate about helping industries that help families build great memories.