it's not about sales...it's profit

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It's Not About Sales… But Profits Coach Thom Finn

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Page 1: It's Not About Sales...It's Profit

It's Not About Sales…But Profits

Coach Thom Finn

Page 2: It's Not About Sales...It's Profit

Know Your #'s…by product

• Example: Thom's Birdhouses• Revenues, Sales Income• Cost of Goods Sold, Indirect Labor, • Gross Profit• Fixed Expenses• Net Income

Page 3: It's Not About Sales...It's Profit

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

Page 4: It's Not About Sales...It's Profit

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 %?

Page 5: It's Not About Sales...It's Profit

Gross Profit per Unit…

Page 6: It's Not About Sales...It's Profit

Gross Profit vs. Net Profit…

What’s the unit break-even for this company?What’s the unit break-even for this company?

Page 7: It's Not About Sales...It's Profit

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

Page 8: It's Not About Sales...It's Profit

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______

Page 9: It's Not About Sales...It's Profit

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?

Page 10: It's Not About Sales...It's Profit

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

Page 11: It's Not About Sales...It's Profit

Return on Investment (ROI)*

• ROI Math• ROI analysis example Thom's Birdhouses

Page 12: It's Not About Sales...It's Profit

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

Page 13: It's Not About Sales...It's Profit

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

Page 14: It's Not About Sales...It's Profit

…thisis

Page 15: It's Not About Sales...It's Profit

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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Page 16: It's Not About Sales...It's Profit

What to do from here…..

• Start from the top of the list.• Work this list in order,

– Know your numbers, etc.

• Questions and Discussion….