Put Your Daily Breakeven Numbers to Good Use by Managing Your Sales

Breakeven Volume & Profit / Loss

Breakeven Volume Chart

(How to Use The Chart Below)

Enter the chart on the left side at your average Overhead (O.H.) $ per Month. Go across to the column that shows your average Gross Margin (G.M.) %. Read your monthly Breakeven (B.E.) $ and below that your daily B.E. $.

Example: O.H. - G.M. 50%

*It is ok to interpolate between the numbers*

Most contractors have a daily install schedule but very few put their install $ per day on the schedule. Therefore, they don't know if they are over or under their Breakeven (B.E.). By showing the $ per day, you create the awareness of the importance of B.E.

One days Sales B.E.

This example is for a company with $80,000 Overhead (O.H.), 50% Gross and $7,600/Day B.E.

Install Schedule

You are going to lose 78% of your profit for the week on Friday. What should you do about it? Pick a recently quoted and unsold job. Call the customer and explain to them that next Friday you have nothing for one of your crews to do. You are a family business and you don't want the crew to have a day with no pay. They have car payments and house payments, as we all do. So I'm calling you to offer you a one time discount of $800 if we can schedule your job for Friday. Of course, if we can't, I will have to call the next customer on my list and give them that discount to keep from sending our crew home Friday.

Here is what happens to your weekly profit.

One $8,000 Job at $800 Discount

Friday Job

Sell

$2,600

$8,000

Disc.

-$800

Sell

$2,600

$7,200

Total Gross

Gross

$1,300

$3,200

$4,500

$4,500 Gross Less O.H. $3,800 = $700 Profit Friday

$3,200 Profit through Thursday +$700 = $3,900 / week

By selling that one job at an $800 discount, you increased profit for the week from $700 to $3,900.

That is a 577% increase!

$700 profit per week x 52 weeks = $36,400

$3,900 profit per week x 52 weeks = $202,800

Do this! It is extremely important!

If you have any questions, please do not hesitate to call me.

Thanks for all you do and as always “Expect More From Us”!

Thanks,

Bruce Martin

Dealer Business Consultant

Value Added Distributors

(757) 469-1205