The First “What Happens If . . . ?” Formula
One curiosity about small businesses is that small changes in revenue or income can have huge impacts on profits. A retailer who cruises along at $200,000 in revenue and struggles to live on $30,000 per year never realizes that boosting the sales volume by 20 percent to $250,000 might increase profits by 200 percent to $60,000.
Accountants like to whip up little tables that describe these sorts of things, so Table 21-4 gives the current story on your imaginary business.
Table 21-4 shows the current situation. Suppose that you want to know what will happen to your profits if ...