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Focus on Gross Profit

Aug 12, 2015 5:00:00 PM

Don't focus on the top line. Gross Margin Dollars - and Gross Profit Percentage - are the two most important numbers on your Income Statement. In other words, it's not how much you sell in volume, it's how much money you make on each job sold. 

Why? Because if don't mark up your jobs high enough, you won't have enough gross profit dollars to cover your overhead, owner's salary, and desired net profit. The vast majority of dealers have chronically weak bottom lines so it's clear they are undercharging for their projects. But that can be changed. All it takes is being shown the right way to price your jobs. 

To work smarter and grow faster, engage a SEN Business Coach to interactively develop a 3-Year Profit Plan. You will create detailed budgets and then reverse-engineer to what gross profit dollars must be collected at projected revenue levels to pay for your overhead and desired net profit. As a result, you will finally derive the correct pricing structure for achieving your financial objectives. 

For more details, contact John Lang LPBC (coachlang@sendesign.com).

Ken Peterson, CKD

Written by Ken Peterson, CKD