And quite a few more, but a good reply none the less.
Exciting business opportunity
- Thread starter winjim
- Start date
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And quite a few more, but a good reply none the less.
KneesUp
Guru
Er, I run my own business and have done for almost a decade, and have a degree in Business Studies from a Russell Group university ...
I presume you are using 'margin' to mean you make x% on an individual sale or item, and 'profit' to mean the amount left over at the end of the year when all costs have been paid? Ergo you could sell everything you sell for more than you paid for it, but still not make a profit overall? I'm just not sure what the point you are making is - making 'margin' (if this is what you mean by making margin) is the same as making-a-loss-but-not-realising surely - and as with any loss it is unsustainable?
It'd be nice if you could be constructive, and when someone says they are not sure what you mean by something you could, perhaps, explain a little more rather than being dismissive? Just to make this a nice place, you understand. You might not want that, I suppose.
As you may tell I am not as well educated as yourself, please accept my apologise I did not mean to cause offense. As you know we get the, how much! every day off of people who do not understand the costs of running a business.
KneesUp
Guru
Oh I know - I get "it must be expensive having premises here" and "I can get it online cheaper" - sometimes from the same people
Vapin' Joe
Formerly known as Smokin Joe
- Location
- Bare headed cyclist, Smoker
The worst time to go into any business market is when it is booming. You get a false impression of the sectors true value and are liable to catch a severe cold when things return to normal levels.
I try and get the guys who come to me for training to set their standard of living for the year by what they earn in December, which is a quiet month in the motor trade. This way come next December they have some money in the pot, unfortunately most by a new car in the middle of a busy spell. Muppets.
Not easy to get the timing right, how do you know when a business has topped out?
KneesUp
Guru
Is December quieter than January in your trade then? Am thinking of swapping cars in January, perhaps it would be worth bringing it forward a month?
Vapin' Joe
Formerly known as Smokin Joe
- Location
- Bare headed cyclist, Smoker
Well, nobody rings a bell. But currently cycling is enjoying an unprecedented boom as a leisure activity, it my not have peaked but I'd guess we're not far off.
KneesUp
Guru
Mate of mine is opening a Tennis Shop this week. Says it's really popular at the moment.
Unless you are going for new then there is normally a better deal in December as sales guys are desperate to put numbers on the board.
nickyboy
Norven Mankey
- Location
- You want hills? We got hills
[QUOTE 3773618, member: 9609"]@screenman is showing his age 
- I was in business for 35 years, when I first started out quite a lot of people would go on about margin, seldom here the word mentioned now. TBH not sure I entirely remember what it means - I sort of think it is what I would refer to as my net profit
purchases - 100
sales - 180
therefore profit (gross profit) would be - 80
minus overheads 25
would give net profit or ('margin (?)') of 55[/QUOTE]
There's pretty standard terminology in business.
In your example, there would be Gross Margin (GM) of 80. That would be Gross Margin % of 80/180=44.4%. Some folk still calculate the Mark Up %, that would be 80/100 = 80.0%
The Profit before Tax (PBT) would be 55. That would be the Profit before Tax % of 55/180 = 30.6%
Then there is tax to pay on the PBT. This leaves Profit after Tax (PAT)
So it we stick to GM, GM%, PBT, PAT then this is consistent with normal business reporting
FWIW, GM% and PBT% can be wildly different. Supermarkets are extremely reluctant to disclose their GM% but I understand it is more than 20%. That is, the pint of milk you buy for £1.00 probably cost them less than £0.80 to buy. But their PBT% is usually 2-3% due to staff costs etc etc etc
- I was in business for 35 years, when I first started out quite a lot of people would go on about margin, seldom here the word mentioned now. TBH not sure I entirely remember what it means - I sort of think it is what I would refer to as my net profitpurchases - 100
sales - 180
therefore profit (gross profit) would be - 80
minus overheads 25
would give net profit or ('margin (?)') of 55[/QUOTE]
There's pretty standard terminology in business.
In your example, there would be Gross Margin (GM) of 80. That would be Gross Margin % of 80/180=44.4%. Some folk still calculate the Mark Up %, that would be 80/100 = 80.0%
The Profit before Tax (PBT) would be 55. That would be the Profit before Tax % of 55/180 = 30.6%
Then there is tax to pay on the PBT. This leaves Profit after Tax (PAT)
So it we stick to GM, GM%, PBT, PAT then this is consistent with normal business reporting
FWIW, GM% and PBT% can be wildly different. Supermarkets are extremely reluctant to disclose their GM% but I understand it is more than 20%. That is, the pint of milk you buy for £1.00 probably cost them less than £0.80 to buy. But their PBT% is usually 2-3% due to staff costs etc etc etc
OP
OP
winjim
Straddle the line, discord and rhyme
Quick update.
As of today, Tony Butterworth's in Middlewood has been taken over by two friends of mine. Both are great mechanics, and really sound, honest blokes. If anyone in Sheffield needs anything bike related, I urge you to please please please go and see them and support them as they get going.
Mike's away at the moment, but when he gets back I gather there will be some kind of grand reopening type event.
As of today, Tony Butterworth's in Middlewood has been taken over by two friends of mine. Both are great mechanics, and really sound, honest blokes. If anyone in Sheffield needs anything bike related, I urge you to please please please go and see them and support them as they get going.
Mike's away at the moment, but when he gets back I gather there will be some kind of grand reopening type event.
