Gross Margin

Gross margin refers to the percentage of sales that is gross profit. In effect, it is gross profit restated as a percentage of sales.

Gathering Data from Sales

Sales Data

In business the best source of new business is the existing customer. Discovering the customer’s habits and characteristics allows the sales department to expand into new geographical territories with similar customer characteristics and/or modify the existing product lines. The key to success is gathering the proper information at the point of sale.

Flipping Houses – Proper Inventory Turnover Rate

Turnover Rate with Flipping Houses

In your typical business operation, turning the inventory over as often as possible has several benefits. First, it generally reduces overall costs, secondly, it generates greater profits and third, by increasing the profitability, the company has a greater return on equity. OK, this seems all well and good, but does turning the inventory over in the house flipping business as fast as possible generate the same benefits? 

Types of Business Models

Business Models

In business there are four distinct business models. Just about any business can be identified with one of the four. The following are the four types of business models: 1) Low-Volume, Hi-Margin, 2) Hi-Volume, Hi-Margin, 3) Low-Volume, Low-Margin and 4) Hi-Volume, Low-Margin.

Mixed Costs

Mixed Costs

Mixed costs are a more advanced business concept.  Mixed costs refer to a combination of both a fixed and variable component.  A common error made by most small business entrepreneurs is the misapplication of the formula.  Many small business owners understand the textbook definition but rarely exercise the concept in reality.

Substitution Principle in Business

Substitution Principle in Business

There are a multitude of principles used in business, some are industry specific, others are functions of business. But there is one that is a general principle that is used across the board in all areas of business. It is called the ‘Substitution Principle’. It works just like the substitution principle in math that we all learned about in algebra. 

Follow by Email
LinkedIn
Share