2. Know Your #'s…by product
• Example: Thom's Birdhouses
• Revenues, Sales Income
• Cost of Goods Sold, Indirect Labor,
• Gross Profit
• Fixed Expenses
• Net Income
3. Know Your #'s…by product
• Example: Thom's Birdhouses
• Gross Margin means…
• Birdhouse Gross Profit as $
• Birdhouse Gross Profit as %
• Margin is important, but you can't take it to
Bank
4. Know Your #'s…by product
• Exercise on 1 of your products
• What is the SALE Price?
• What is cost of labor?
• What is the cost of material?
• Any other costs to produce?
• S-COGS=GP
• What is your GP$?
• GP as %?
6. Gross Profit vs. Net Profit…
What’s the unit break-even for this company?
7. Know Your #s…for your whole
business
• TOTAL Gross Profit
• FIXED Expenses are….
• Gross Profit-Fixed =NET Income
• What are Thom’s Fixed?
• What was his GP by product?
• So GP by unit x______= Total GP
• So Thom’s Net Income =GP-Fixed
8. Know Your #s…for your whole
business
• Exercise on typical month
• Total Sales were_____
• Your Gross Profit % is____
• So your Gross Profit $ is____
• What are you typical fixed?______
• So Net Income is GP-Fixed or______
9. Break Even
• Enough Gross Profit to cover all fixed
• Break Even Enough Gross to cover fixed
AND a goal of profit
• Example: Thom's Birdhouses Business:
– Fixed Expenses are $1000
– And GP% is______________
– What is Break Even in Sales?
10. Break Even*
• Break Even on ANYTHING
• Break Even on advertising
• Break Even on machinery
• Break Even on Team
• Break Even Analysis BEFORE,
• Return on Investment After
12. Dogs and Cows: Your Product Mix
• A Product Mix simple means…..
• Think about your product MIX and what
you are offering learn from the big boys
• All Products Great and Small….Impulse
• Dogs are….
• Cows are…..
• The Pin Ball Machine principle: Always a
Dog, Always a Cow
13. Production Goals
• Know in advance how much you should
make
• Forecasting Demand
• Keep a History: What sells well, what
doesn’t sell well.
• Simple Turn Tracking Sheet
• What turns the fastest? Make more
• What turns slowest? Make less
15. Production Goals
• Restocking Levels
• The Real Damage of Empty Shelves
• Staying stocked looks better more sales
• How to Stock if you are tight on Cash-
Dollar General Solution
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16. What to do from here…..
• Start from the top of the list.
• Work this list in order,
– Know your numbers, etc.
• Questions and Discussion….