What is the Best Business Decision?
Should you focus on INCREASING YOUR SALES or REDUCING YOUR COSTS to increase your profits by $1,000?
The following table will help you answer this important question.
- What is your profit percentage?
- What amount of incremental sales is needed to increase profits by $1,000?
- What amount of cost reduction is required to increase profits by $1,000?
|
A
|
B
|
C
|
|
|
Net Profit
|
Required Sales Increase
|
Desired Cost Reduction
|
|
|
%
|
|
|
|
|
15
|
$ 6,667
|
$1,000
|
|
|
12
|
$ 8,333
|
$1,000
|
|
| |
|
|
|
10
|
$ 10,000
|
$1,000
|
|
|
8
|
$ 12,500
|
$1,000
|
|
6
|
$ 16,667
|
$1,000
|
|
5
|
$ 20,000
|
$1,000
|
|
4
|
$ 25,000
|
$1,000
|
|
3
|
$ 33,333
|
$1,000
|
| |
|
|
|
2
|
$ 50,000
|
$1,000
|
| |
|
|
|
1
|
$100,000
|
$1,000
|
|
You must increase your monthly Sales $10,000 to $50,000 per month to generate the $1,000.00-$3000.00+/month that a Vanguard PowerMax™ Gas Booster Heater provides to your Bottom Line. What will it cost you in inventory, labor, benefits, and facilities to generate this savings/profit each month?