Sign & Digital Graphics

February '19

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66 • February 2019 • S I G N & D I G I T A L G R A P H I C S Checking the Pulse of Your Business Growth through understanding and preserving strong gross margins Vince DiCecco is a business training and development consultant and owner of the Acworth, Georgia-based business, Your Personal Business Trainer, Inc. He has been sculpting his sales, marketing and training techniques since 1979, and he has shared innovative and practical ideas on business management excellence for two Fortune 200 companies, the U.S. Coast Guard, and in seminars at many sign and digital graphics trade shows. Since 2003, he has been serv- ing small- to mid-sized companies in their efforts to strive for sustained growth and market dominance. Contact him via email at vince@ypbt.com or visit his company website, www.ypbt.com. Fitness Assessment Every good performance-improvement program—whether it's aimed at your body or your business—begins with an assess- ment of your current state of fitness, sort of a preliminary physi- cal examination. So please answer the following three questions honestly. Your trainer will be with you shortly… 1. What has your company's gross margin been over the past 12 months? A. Under 35% B. 35% to 65% C. Over 65% D. I have no idea what my gross margin is or what it should be. E. What's a gross margin? 2. (True or False) When I mark up my products by 50 percent, I am ensuring my business will enjoy an overall 50 percent gross margin. 3. If I can maintain my target gross margin throughout the year, I should expect to: A. Break even. B. Still lose money because the prices on the street for this industry are too low. C. Make a profit when everything is said and done. D. There is no guarantee to make a net profit based solely on achieving a desired gross margin. The Pulse of Your Business If your answer to question 1 was D or E, thank you for your honesty. Sad but true, many business people in the sign market- place have limited awareness of how gross margin is determined, what their margin is, or what it should be. Think of gross margin as your business pulse. This "vital sign" can tell you the health of your business, of a particular sale, or of a product line you carry. Some people have a strong, healthy pulse. Others have a slow, weak one. Still others have no pulse at all. We typically refer to this last group as dead. Similarly, a business with a near-zero gross margin should have its Last Will and Testament up to date because it's not going to be around for very much longer. The formula for determining gross margin is simple: Gross Sales Revenue ( GSR) minus Cost of Goods Sold (COGS), divided by Gross Sales Revenue (GSR). S o, a few months back I'm guessing you renewed your annual New Year's resolution to get back into shape. To regain that washboard stomach and shed some poundage, right? But this year, you were really serious. You joined a health club, bought a FitBit, downloaded the MyFitnessPal app, found a reasonable diet, and hired a personal trainer for motivation and guidance, didn't you? Alas, after a couple of exhausting ses- sions, succumbing to tempting desserts, and suffering a bruised ego, you slunk back to the couch, grabbed the remote control and devoured your favorite bag of munchies. Tsk, tsk. You may've retired that well-intentioned resolution for another year, but hopefully you made a similar resolution for your business. But you didn't seek out a personal business coach to help though, did you? Hmm. That's where this column comes in: Think of it as your personal business trainer, here to help you uncover the flabby spots, tone up the weak areas and generally ensure that your business is as healthy as it can possibly be. Sound like something that could help? Then, let's go! B Y V I N C E D I C E C C O Make it Your Business ARCHITECTURAL AND ENVIRONMENTAL RUNNING THE BUSINESS

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