The cost of a business has two sides: the one on paper and real. (To read more click on Business Myths ) For example, say you buy a franchise for the sale of computers, and assure that the return will be 20% (ie, you will win 20% on their investment each year) .
However, you do not invest enough time, is equal to its customers, hire a salesperson who knows nothing about how to sell … all this, though you may not believe, is what is business, and therefore affect whether the business is profitable or not.
This is ultimately the real profitability of paper passes 20%, maybe 2%. That is, all the money invested is earning only 2% per year (less than inflation over the year).
Depends on the location of the business
Another factor little discussed in books and courses of business is the value of the business location. Following the example, say you buy the franchise for the sale of computers, but puts it in a place that is at home, in a colony or family neighborhood.
Depends if measured as a percentage or amount
Many entrepreneurs make the mistake of looking at CIFAS in numbers and not percentages. For example, say you sell computer parts in his shop, and the numbers tell the following:
– A Computer Sale – Sold $ 10.000 – $ 1.000 Total Utility
– Sale Compu Maintenance Service A – Sold $ 500 – $ 250 Utility
– What product is worth promoting more?
Answer: mantemiento Service. If you see in terms of percentages, profits generated from the sale of computers to 10%, but MAINTENANCE service generated revenues of 50%.
What business is profitable? Conclusion
If Search How do business is profitable ? and wanted to tell him “This business,” chances are you are lying. Unless given a set of such balance sheet, costs, sales, etc.., The only way to determine if a business is profitable business is to think that interest you and determine how pay through a business plan.
More likely is that in 6 months close your business. The location of the business is among the top 3 most important factors to consider to increase sales . For example, the location where the business can be more profitable, in this example would be in a Computer Square or a shopping mall.