Definitive Business Plan, Second Edition, The

Chapter 8. Getting to Gross Profit

Breathe easily

Forecasting sales volumes

The big picture – the economy

Up close and personal – industry and product demand

Pulling it all together

Cost of sales

Gross profit

Writing it up

“The absolute fundamental aim is to make money out of satisfying customers.”

—Sir John Egan

The main objective of this chapter is getting to gross profit (sometimes known as the gross margin) – trading income from sales less directly attributable costs. These are the cost of sales such as the spending directly associated with producing your product – raw materials, components, production costs. If you have a simple product, sales costs might be no more complicated than so-many hours of a consultant's time or the buying price of a ...