Sign & Digital Graphics

February '19

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RUNNING THE BUSINESS the latter premise is that if you "mark-up" a product and then later "mark-down" that item by the same percentage, it should take you back to where you began. I think that most people find working with the second defi- nition confusing, so they commonly default to the simpler one. No Magic Formula The correct answer to the third ques- tion is D. There are no guarantees that you will realize a bottom-line profit in your business by maintaining a desired gross margin for any length of time. Rising fixed expenses or out-of-control variable expenses (such as excessive spending by your sales and marketing personnel) could quickly erode whatever gross profit you've been able to capture. However, with some careful control of the expense items in the lower half of your profit-and-loss statement, you could turn a handsome profit at the end of your fiscal year—profit that can be invested back into your business. Contrary to what some seem to believe, the primary reason companies are in business is to make a profit—not merely to create jobs to help reduce the unemployment rate, nor to provide something for employees to do with their time. Along this journey that will get your business into the lean and mean shape necessary to turn a profit, we must be able to measure our progress toward success easily and often. Gross margins may be a mere indi- cator—and not the only one, mind you—but it's a critical tell-tale sign of the overall state of your business's health. Monitor it often, particularly if raw materials costs are fluctuating wildly— as is the case lately with gas prices. Allow the term gross margin to become part of your daily vocabulary. Find ways to maintain and improve it—like raising prices when production costs go up and/ or when customer demand rises, reduc- ing manufacturing costs, or adding new products to your marketing mix that command higher margins than you are accustomed to. Good luck! SDG 68 • February 2019 • S I G N & D I G I T A L G R A P H I C S Make it Your Business CONTINUED Product Highlights Welcome to the Product Highlights section, where each month we offer you resources to enrich and expand your business with great services and products from our adver- tisers. Quickly find and request free information on the suppliers featured in this section by visiting The Ultimate Flatbed Cutting Systems * APR 36-MONTH LEASE % 0 SAVE UP TO 10,000 $ Not just printers. Partners. You rely on us because they rely on you. Trusted wholesale partner for 42 years... and counting! // 877-764-5757 AND MORE SIGNS ROLL LABELS MAGNETS PLASTICS DECALS

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