[Market-farming] So little space so much business

Steven Rogers singingpigfarm at earthlink.net
Wed Feb 9 23:01:06 EST 2005

As you can tell by now I use gross profit margin constantly. It is by
no means the whole story. If you have a high gross profit margin
but your gross sales are low then you will struggle, as Mike (jasperm)
alluded to. Steve Sando said that gross sales are not relevant on their 
own. I agree and should have asked him to elaborate. Sorry, Steve!
Gross sales examined in the light of gross profit margin take on a whole
new meaning and relevance. I can derive meaning form my weekly
 gross sales figures because I have already done the work to determine
my gross profit margin. Now just looking at gross sales numbers tells me
useful information because I look at them in the context of gross profit margin.
Mike asked about cash flow. That is the other big thing I track. Every Tuesday
 morning, I sit down and forecast my receipts for the coming week. I then
budget each dollar of forecast revenue for the coming week. I forecast and then
I spend it on paper so when the money comes in I already know where it is
going. After forecasting and budgeting for the coming week, I total my actual
receipts for the previous week and write my checks in accordance with my budget.
When life throws me an emergency, I first find ways to increase my receipts
over the next few days: either going out and collecting checks in person instead
of waiting for them to come in the mail, or I find ways to increase my sales over 
the next week to cover the shortfall. In some cases I also forecast and budget on
Saturdays, and sometimes every day. Either you control your money or your
money controls you. I like to be in control, that's why I OWN THE BUSINESS.

Let me tell you how this discussion has helped me. First, I logged onto the
Rancho Gordo website. Very impressive. Steve is at the level now that I am
trying to get to. It gives me hope to see someone who has already mad it 
because that lets me know it is not impossible. Second, I believe it was Beth,
someone mentioned using Quickbooks. That inspired me to install and setup the
Quickbooks Pro I bought about a month ago. After the setup interview, which was easy
It was tedious entering in all of my customer and item information. Once entered 
though, it is painless to enter the historical data. I entered the first 2 weeks of invoices
(65 of them) and ran some reports-very useful. And my CPA will be so proud!

Steven Rogers
singingpigfarm at earthlink.net
EarthLink Revolves Around You.
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