Today we are talking about how to make sure our business can be profitable. That means MATH!! Some of you have some idea of your COGS– the cost of goods sold. Remember that you need to know:
- How much each unit costs. How much each necklace costs to make, how much each pair of glasses costs to make, how much each skateboard costs to make, etc.
- you need a list of all materials needed for one unit
- the cost cost of each material
- cost of time to make/order/put together the product
Then you need to make a prediction of how many “units” you are going to sell each month of the year. Take into consideration the seasons– holiday season, t-shirt season, surf season, etc. Based on this prediction, how many units will you sell in a year?
THEN, predict how much it will cost to make that total number of units.
NOW, predict your average monthly operating costs. This includes your fixed costs (that stay the same each month) plus your variable costs (that change according to how many goods you will sell each month).
FOR YOUR BUSINESS TO MAKE MONEY:
You need to think about your projected monthly income statement. Go to this site and try some numbers.
Manufacturer Agreement: https://docs.google.com/document/d/1vs78bHQTTr03yLH68FPVlhAP24ESiQik0w4XGajpNrE/edit?usp=sharing
YEA Partnership Agreement: https://docs.google.com/document/d/152PWUgh-BInoaNeNnMmbzPLyvdVpF25rBC3TS6vPWDk/edit?usp=sharing