Tools & Resources

Making Managing Your Business Easier

We have a multitude of tools and resources that we use on a day-to-day basis to run our business efficiently. We will share them with you here.

What is Gross Margin?

According to Wikipedia, Gross Margin is the difference between sales revenue and the cost of goods divided by revenue.  It gives you a percentage, your Gross Margin a.k.a GM.

GM is the rough profit you make.  It doesn’t take into account the related cost of running a business (Salary, Publicity, Expenses, etc).  «It doesn’t show if a business is making or losing money on itself, but it gives indication.

It’s important, EXTREMELY important to maintain a healthy Gross Margin.  Otherwise, you might work yourself out of business.

We often hear business people say that they will make their money on volume.  Scaling is an effective way of increasing a business’ bottom line.  However, your Gross Margin must be higher than your Cost of Operation.  If you are losing a penny every time you sell a product, the more you sell, the deeper in the hole you get.

As a business owner, you should know what is the GM for your industry, or at least what Gross Margin would allow you to be successful and profitable.  At then end of the day, we are in business to make money.