Adam realised, that even though he was getting more money for the goods than he had paid for them, the store had brought him a loss. He began to wonder what to do: “Not only do I have to break even, but I also have to make a living from this business” he thought.
We can see that if someone wants to run a business without even the simplest of calculations, he will be at the mercy of fate. It might as well turn out that Adam gained a lot from his company, but without any calculations, he would not be able to analyse and optimize his business. Also, when in a crisis, he would have a problem finding the reason why he suddenly stopped earning money.
So Adam started counting. As we saw, he learned that his business took losses, but he didn’t yet know why, so he started to look for a reason. At the very beginning, he checked how individual products were selling. It turned out that every three days he was selling all the bread he bought, every four days – all the vegetables, and every five days – all the fruit. He also realized that some of cleaning products didn’t sell, because they are longer-lasting products, so people don’t buy them every week. At the same time, some products, such as juices, went bad rather quickly, which caused Adam to throw away half of them every week. After counting everything up, Adam made a shopping list, but this time he decided he would buy more pre-packaged bread, vegetables and fruit so he wouldn’t run out so quickly. He also bought half as many juices and did not buy cleaning products at all, because he still had a supply from previous purchases. He decided that he would only buy it, when he would have a week’s supply of cleaning products left. This time, he paid only $750 to the wholesaler.
After a week, when people saw that Adam’s store was better stocked and had more products actually needed on a daily basis, they started to buy there more willingly. After all, Adam’s well stocked store saved them time and fuel money. Sales became higher and more stable. Adam’s clients spent in his store $1500 every week. And every week Adam would go to the wholesaler and buy best-selling products, and once every four weeks he would also buy cleaning products. This meant that he bought products for $750, three times a month, and once a month he bought for $1000. At the end of the month, Adam calculated his sales and expenses again: