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It's Not About Sales…But Profits
Coach Thom Finn
Know Your #'s…by product
• Example: Thom's Birdhouses• Revenues, Sales Income• Cost of Goods Sold, Indirect Labor, • Gross Profit• Fixed Expenses• Net Income
Know Your #'s…by product
• Example: Thom's Birdhouses• Gross Margin means…• Birdhouse Gross Profit as $• Birdhouse Gross Profit as %• Margin is important, but you can't take it to
Bank
Know Your #'s…by product
• Exercise on 1 of your products• What is the SALE Price?• What is cost of labor?• What is the cost of material?• Any other costs to produce?• S-COGS=GP• What is your GP$?• GP as %?
Gross Profit per Unit…
Gross Profit vs. Net Profit…
What’s the unit break-even for this company?What’s the unit break-even for this company?
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
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______
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?
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
Return on Investment (ROI)*
• ROI Math• ROI analysis example Thom's Birdhouses
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
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
…thisis
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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What to do from here…..
• Start from the top of the list.• Work this list in order,
– Know your numbers, etc.
• Questions and Discussion….
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