Understanding your True Cost of Business
Marco PenaBusiness Development Manager
Let’s make sure you are profitable
Making sales doesn’t mean you are profitable
Estimating your cost is a really bad idea
Recent study found that over 80% under calculated their cost
Profitability isn’t always tied to you sell a product for
More than cost of a shirt
Gildan 5000
Wholesale: $1.56 white
More than the cost of a shirt
Most people use simple math
50%
Sal
e P
rice
Profitability Ratio A measure of profitability
Different types – gross profit margin (GPM), operating margin (OM), return on assets (ROA), return on sales (ROS) and return on investment (ROI)
GPM formula – GPM=GP / NS * 100
Marco Polos – sells to schools, retail and club teams
GM = $52,000 / $250,000 * 100
Gross Margin is 21%
But our industry is different
What you do is a really long process Client selects product(s) that they want
Client selects the design they want
Business owner types up quote
Business owner creates visual mock up
Business owner converts mock up to PDF
Business owner sends quote to client via email
Business owner follows up for order approval and deposit
Business owner orders and receives products(s)
Production begins
Production completed, follow up with client
Business owner collects balance due
Business owner adds order to Quickbooks and files away for another day
So how do you make more money?
Two ways• Charge the client more!• Become more efficient
Business Hub = Efficiency
Let’s take a look
ResourcesGive us a callBrian (562) 320-8771 x109
Send us an [email protected]
ROI Calculatorhttp://www.deconetwork.com/roi
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