How Many Sales Do You Need To Make The Profit You Want?

How Many Sales Do You Need To Make The Profit You Want?
December 7, 2017 Biznostics

A question we often get asked is how many sales do I need to make to make the profit I desire?

So what is that magic number for you?

Most business owners are wishy-washy with their sales numbers and will either just take whatever that comes their way or they think ‘as much as they can’.

However, if you are able to know the specific number to aim for, you can focus your efforts on getting that number.

So what does it take?

Well, it is all about knowing your numbers.

There are a few key numbers that you need to take know in order to work this out:

1)  Gross margin.

This is the percentage profit that you make in selling your product or service.

2)   Expenses

What are your average overheads per month? How much does it cost you to run the business?

3) The amount of money you plan to take out of the business

How much money per month do you want to withdraw for yourself as a business owner?  This may be as drawings, a salary or a dividend.

4) The amount of money required to keep the business growing

How much money do you need to make to keep moving your business forward?  This may be for working capital, expansion or just to build up a buffer to allow for downturns or seasonality.  

So how do you work out your number?

Firstly, we need to sum up the total dollars required:  

Total profit required = Expenses + Amount of money you want to take out + Amount to Keep Business Growing

Next to work out your sales required:

Sales Target = Total Sum / Gross Margin % 

This gives you the sales target you need to hit to meet all your business needs.

 

P.S. Whenever you are ready here are 4 ways we can help you build and grow your business:

1) Download your copy of 3 Proven Tactics That Give You 5 Hours Back in Your Week

This totally free guide includes tips, time-savers, and expert advice on how to immediately claim back 5 hours of your time each week. Inside you’ll discover 3 proven tactics to stop time being wasted in your day so you get more done each week. To access the guide click here

2) Watch the Business Freedom Formula Video

In the video you’ll to discover the step by step blueprint we use to help small businesses create their version of business freedom. This could be simply streamlining your business so it runs more efficiently, increasing your profits so you have more choices or setting your business up so you can have time off without worrying that it is all going to fall apart. Click here now to watch

3) Book a 10 Minute Exploration Call

If you would like to explore how Biznostics can help you run and build your business, then book your 10 minute exploration call. On the call we’ll find out a little bit about your business and work out if and how we can help you.  Book your call here

4) Join our Business Freedom Program

The Business Freedom Program is designed for business owners who feel stuck in the day to day running of their business and their business is not running as efficiently as they like. It helps you make your business much more profitable, much more efficient and much more enjoyable to work at.  We are putting a new group together next month so if you would like to build a strong and successful business email us here with ‘Business Freedom’ in the subject line.