The Verity Community

[KKnudsen]

Last lesson of the year!!

Lesson 20 – Determine Potential Profits
- Estimate your profits based on a variety of sales amounts.
- How many sales could you realistically make in a week? In a month? What numeric amount of sales would you need to reach to reach your target profit in a given time frame?
_________________
Kathleen Knudsen

Business & Communications Program Advisor
business@verity.iblp.org
communications@verity.iblp.org
317-376-9248

[dpike]

One really cool thing about this business: the more you do short term, the more you will passively make long term. Let’s say I work a little (about as much time as a good part-time job) and earn $1,000 one month (a very possible and even under-achieving goal). The next month I make an additional $2,000, and the third month I make an additional $3,000 (this is all in net profit). If I do not work for an entire year after that, I will still be earning anywhere between $1,000 - $2,000 approx. each month. In reality though, I will still be working, and making more and more money each month.

The best part is, I’m not just earning money, I am assisting in healing and saving lives through this ministry of this business.

All depending on the amount of time put into this business, people can make anywhere from $0 - $12,000 profit per week, yes, per week. This is partly due to costs being so low since you do not pay for processing and food production (it is a whole raw food).

[MRutler]

I figure that depending that if I would work about 3-5 days a week and clean at least 2-3 cars a day I could make around $2000.00 per month. Of course I would have to take my cost out of that then but I think I could keep my costs low and still make a very nice profit.
I think at tops I could make close to $1000 per week if I had a very steady schedule of cars to clean.

Maryrose

[rhersey]

If I worked a 40 hour week I could make $800 a week. The demand for decorators is high and I think that I could fill this schedule easily.
In order to begin making real profits I would have to work for a few months to pay off the expenses of starting my business.

[cfleming]

Estimate your profits based on a variety of sales amounts.

In estimating potential profits, I decided to back down on my selling price (and therefore my profit) by a dollar from what I figured on my last post. The profit per loaf now stands at $0.74 per loaf. From this, potential profits for various levels can be computed by multiplying the profit per loaf by the number of loaves sold. In my pricing analysis, I figured that one batch of maple raisin bread would be the equivalent of 1/16 of one market day's sales. (In reality, I would be selling several different products.)

Profit per loaf......................$0.74
Loaves per batch.................x_11
Profit per batch...................$8.14
Batches per market.............x_16
Profit per market............$130.24
Markets per week...........x____4
Profit per week.............$520.96
Weeks per month...........x____4
Profit per month........$2,083.84

How many sales could you realistically make in a week? In a month? What numeric amount of sales would you need to reach to reach you target profit in a given time frame.

While my estimates of weekly and monthly sales are probably on the high side for the first season, I think they could be achieved in time. My initial target profit would be at least $0 (the break-even point)! (Compensation for my labor is covered prior to breaking even.) Therefore, if my estimates of price, demand, etc. are fairly accurate, and assuming that all costs are variable relative to each market, the first market could be more than a success! Any profit beyond the break-even point would probably either be invested back into the business or spent on pay raises!

[korr]

I really don't have enough knowledge about how much money it takes to run a restaurant, so, if it's okay with everyone, I will adopt Olive Garden's numbers as a ballpark figure. Olive Garden (and other Darden-owned restaurants) would probably be my main competition. I realize that they've been in the business for a while, so this will be what my company would hopefully look like in, say, five years. According to Yahoo!Finance, the net earnings for the quarter ended this past November for Darden restaurants (the parent company of Olive Garden) is 3.6% of sales. I don't know if there is a specific one for Olive Garden.

As a stab in the dark, I would guess the number of customers I would serve to be about 100-150 per day after the business is established and has been going for several years. That would be 700-1050 per week and 2800-4200 per month.

One interesting thing I learned is that the cost for food is 30% of sales. In other words, the $12 meal actually costs $4, not $1 like I calculated. Ooops - my bad! I guess $12 doesn't seem too bad, especially after you split it with someone... However, I would still like my meals to be less expensive.

I hope y'all have a great summer!
Kristina

[JonIngersoll]

Hmmm This is an interesting question.

Because it's such a seasonal business, Lawn care would probably be more expensive for me...

- Estimate your profits based on a variety of sales amounts.
- How many sales could you realistically make in a week? In a month? What numeric amount of sales would you need to reach to reach your target profit in a given time frame?

lets see for a given month of basic sales, say about 8 clients a week for a 4-week-month at a basic lawn mowing:

minimum of $480/week @ ~$60/job or around $1920/month

for good sales... say more people have bigger yards:

8 clients a week with 3 small-acre yards, 4 medium-acre yards and one large-acre yard would be respectively $120 + ~$340 + ~$200 = $660/week or $2640/month. I suppose I would have to raise my prices