Running a business can be difficult with the many components that there are. One very important thing that many businesses neglect, is knowing what there margins are. Understanding your bottom line is important, but understanding what your margins are on each product or service that is offered is absolutely necessary for long term success.
You can show gross revenue at 4 million dollars and have 2000% return on marketing….and still take a loss, if margins are not known. Knowing how much it costs to sell your product or service is your margin. If you sell a very expensive product for $2,ooo, but it cost $1,500 to acquire, and that’s not accounting for labor or marketing. Currently you are at a 25% profit margin, take into consideration your other expenses and it could drop to between 10-15%. Understanding the numbers that go into and out of your business again, are necessary.
They will help determine
- Marketing Costs
- Research & Development
- Employees Pay & Bonuses
- Market Testing
- And more!
We invite you to learn from our specialist, Joel Trass. He will be leading a small business workshop and Q & A in the November in Phoenix, Arizona. We will keep you posted on location and times. He offers valuable insight and experience on how to make sure you know key things in your business. Like we said, there are many facets of business and it can seem overwhelming. Join Joel and learn more about important aspects of every business.
If you would like to learn more contact us and we will email you more information, along with location and times for Joel Trass.