Page 58 - #54 English

Management

Article by Ed Arvidson
Add $1,000 or More to Your Business's

bottom Line in 30 Days! Part

1

I've never met a coffee business owner who said they organize and prioritize your effort.
couldn't benefit from an extra $1,000 of bottom line income
each month. Increasing your bottom line by that amount is not How is business bottom line increased?
difficult, if you take some simple actions and stick to them; reli- So how do you go about increasing your business's bot-
giously! The real power in these seemingly insignificant actions is tom line? There are really only two things you can do to increase
multiplied when they are all done in conjunction with each other, income, they are:
and they are done consistently. • Decrease Costs & Expenses
• Increase Sales
For those of you who already have a profitable business,
the following information will help you squeeze the maximum That's it, it's that simple! Profitability is achieved or in-
profitability out of your operation. If you are almost, or right at creased when sales rise to the level that the gross profit is greater
business profitability, this information will push you over the top. than expenses. As sales rise, gross profit increases. Gross profit is
For those of you who are deep into negative monthly cash flow, the amount of money that is left over after you have paid for the
this information alone may not make you profitable, but it will costs that are directly associated with the creation of your sales.
certainly help your business; (better to "bleed" a cup each month In other words, the dollar value of beverage and food ingredients,
as opposed to a quart!). If this is your case, I will present you with paper products, and retail merchandise that you used over a pe-
another source of information at the end of this action plan, that riod of time (week, month, year), which produced your sales over
should help you sort out if your business is salvageable, and what to that same period.
do after that. Remember, even if you think the prognosis for your
business is fatal, it will be worth more to a potential buyer if it is still So, for example, if your business generated $30,000 in
operating. This information, at very least, will buy you time, and sales last month, and you calculate that $10,000 of product was
you might be surprised, it could even revive hope for your business! used to produce those sales, you would understand that you
had realized a gross profit of $20,000. You would also be able to
Don't become overwhelmed as you read through the calculate that your gross profit was 66.6% of sales, ($20K ÷ $30K
information. Yes, a lot of information is covered, but I have pro- = 66.666%), and that your cost of goods sold was 33.3% of sales
vided a bulleted, easy-to-use action plan at the end to help your ($10K ÷ $30K = 33.333%); both good numbers!
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