Dodo Loves Marketing

Now that we have examined some of the negatives of expansion from a very small business to a medium-sized small business, let’s give equal time to the potential benefits.

One of the most important components of gross profit is the degree to which you’re able to set your selling price. Your ability to set that price is largely a function of your control of the marketplace. At one extreme, you may have a patented product for which there is no substitute, and for which there is totally elastic demand (people will buy it at any cost). If that item costs you a dollar, you may be able to sell it for ten dollars, one hundred dollars, even one thousand dollars. At the other end of the spectrum, you may be selling wheat in Nebraska. In that case, it’s unlikely that you’ll be able to command one-tenth of one cent over the market price on the day you sell. ..more

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Lots of people give money every once in a while—usually when someone asks for it. But the real power in giving comes when you give every month to the same causes. The best kind of giving adds up, little by little, month to month, year to year, like a savings account. But with giving, you’re saving more than money. If you’d like to give a portion of your income regularly, here are some steps to help you get started.

GETTING STARTED

1. PICK A PERCENTAGE

Choose a percentage of your income that you’d like to give each month. Work with that bonehead-easy budget I showed you to make sure that you can afford the amount you commit to. ..more

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The income statement is the one we all tend to focus our attention on because it provides the proverbial “bottom line”— the company’s profit or loss. It’s usually done on a quarterly basis.

As you look at the basic income statement you’ll notice that it seems a lot like the cash flow statement. You start with your revenues less commissions. From that, you subtract direct labor (drafters and architects, for instance, for an architectural firm) and materials.

The result is a subtotal that gives you your gross profit or loss. (The percentage of gross profit to revenues can be a very useful number. It’s your gross margin and can help you compare yourself with others in your industry—it tells you immediately whether your labor or other costs are way out of line.) ..more

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