Break even analysis

[atm84]

Just make some assumptions eg £2k materials costs per month average, 25% mark up, invoiced at £2.5k per month. Or whatever you think realistic, so long as you can justify the values used. Then include in the calculations along with labour etc

Thank you. I'll have a go with that.

 

[Octopus]

Thank you. I'll have a go with that.

Materials for resale are not costs or overheads!

 

[atm84]

They are variable costs

 

[uksparks]

I know it's not important at the moment, but I want to know how much he wants to borrow and to spend on what?

 

[Octopus]

They are variable costs

Parts you sell to clients are not business costs. Fuel , insurance , tools , etc are costs or overheads depending on your terminology.

My business plan assumes I buy about £1 k of materials for resale with an average gross margin of about 18 percent so I will make about £2400 per year on this

 

[Hellmooth]

Admin close thread. I'm wasting my time

You've handled this thread well.......

 

[Englishman]

I'm surprised he's had any serious answers whatsoever considering how narky he's been.

 

[HandySparks]

Thank you. I'll have a go with that.

'Materials' are going to be hugely dependent on the sort of business you're running. If you're going to be installing lots of high value equipment, you might make a significant part of your profit on materials. On the other hand, if you're mostly doing EICRs and fault finding, you may make nearly nothing on materials.

 

[Englishman]

I think knowing what you're charging and taking time over quotes is hugely important as well.

 

[atm84]

Parts you sell to clients are not business costs. Fuel , insurance , tools , etc are costs or overheads depending on your terminology.

My business plan assumes I buy about £1 k of materials for resale with an average gross margin of about 18 percent so I will make about £2400 per year on this

Of course they are costs. They are variable. The more business you do, they vary. I've got the info I need so cheers

 

[atm84]

Think you need to check your math Murdoch

 

[Octopus]

Think you need to check your math Murdoch

Why?

to calculate gross margin you divide the sum by (100 minus required GM) total so:

(£1000 / (100 - 18))

£1000/0.82 = £1219

so GM is £1219

so your GM on £1000 materials for resale is £219 per month so

£219 x 12 (to get annual) = £2628


Or calculate mark up

so £1000 * 0.18 = £180

£180 * 12 = £2160

Its important to differentiate between gross margin and mark up, as you can see it has an impact on your profits!

Either way the costs associated with parts you sell/supply to your customers are NOT business overheads - you need to brush up on your terminology IMHO

 

[Diddy]

Too funny lol. OP comes to thread asking for help but not wanting to go into details. Then even when he get's upset and ask's for thread to be closed members STILL go out their way to assist him or at least point him in the right direction...THEN the person asking for help tries to challenge one of the people helping....priceless. I think op should go to someone and pay them to do all this for them...or ask the bank for a loan for a new kitchen or something simple lol.