Tuesday, March 04, 2014

The Difference Between Sales and Profits

This is an important distinction to know:

SALES is your total revenue.  NOT YOUR TAKE HOME PAY.

PROFITS is what you get to keep after expenses.

Somebody tell the fat balding middle age faux "businessmen" and fratboy sales reps that.

5 comments:

  1. And while you're at it, tell it to the pasty faced comptroller and CFO's too...

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  2. Anonymous8:44 AM

    "We'll make it up on volume"

    /or something equally vapid...

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  3. Jesus, don't show this to the generation of nondescript female 'entrepreneurs' that have sprung up on a steady diet of SEED grants and mutual support. You'll inspire more hate than the Duke Lacrosse team.

    AS someone else suggested elsewhere, "Gents, go long on vibrators and cat food."

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  4. If they can't manage those terms, I wonder what they think when they see their more appropriate synonyms, "net" and "gross"? This is insanity.

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  5. Like a G-69:21 PM

    Wow there are that many people who don't understand the difference between income and profit? I understood that shit as a middle schooler with no economics or accounting exposure!

    Hell, I understood it so well I never put that much emphasis on /income/, as if there was no profit there was no incentive or there was even a major disincentive.

    People talking big about how big their end-of-cycle numbers were when, after subtracting expenses and investment, their profit margin turned out to be thin, always irked me. I tend to price economic activities two ways: what percent is the profit to total income, and what is the profit divided by the time for turn-around. I compare it to a 40 hour $12/hr worker's pay.

    It simply does not pay to spend $49,000 and two months (at equivalent work input to a 40 hour/wk worker) to get $50,000 for a total of $1,000 over the top of the expenses. Yea, woo, you closed at $50,000 for two months, but in reality you only walked away with $500/mo.

    It may not be a bad idea to do that if the time-investment is small (like 5 hours a week), because all you need to do is stack that several times until you're at full time-utilization. $1,600/mo is minimum for something taking full-time to be worthwhile, while $2,000+/mo is more comfortable. The one non-renewable resource you expend daily is time.

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