Tiny Little Difference Can Smash “Cash Flow” Glass Ceilings

Sometimes, getting it RIGHT is so bloody hard

Especially when our education system doesn’t teach you the basics right?

(There are some excellent educators out there but the system is set up to train you to be a great worker NOT a great business owner)

Rant over!

Let’s Get It Right – OK

By getting it right, I mean making sure you have the basics sorted

The “basics” I talking are…

MARGIN vs MARKUP

They’re not the same thing

Yet I’ve met guys who’ve run massive, international businesses

Who didn’t know the difference

(Not their fault – just no one pointed it out)

Trust me… Getting this right will give big returns

INSTANT RETURNS

So back to basics ok

MARGIN vs MARKUP

The two are NOT the same

Yet many people confuse the two

Margin is the percentage of dollars you’re left with after the costs of your product are deducted

Let’s say 40% MARGIN

Mark up is the percentage you add onto the cost of your product

Let’s say 40% MARKUP

Here’s what happens if you get them confused

You’ve got a product you sell for $100

Your margin is 40% or $40

(40% of $100 = $40)

This means the cost price is $60

(100 – 40 = 60)

This is where some people go wrong

They MARKUP and expect to make 40%

Fact is they’re making WAY LESS

Let’s do the numbers

Cost is $60 – Mark Up is 40%

Your sell price is $84

($60 x 40% = $24)

($60 + $24 = $84)

In truth, your margin is only 28.5%

BIG DIFFERENCE

Truth is if you want to make 40% margin (or more)

To make 40% your markup needs to be 66.66%

Crazy right

But there you have it

Getting the basics right…

Well, they always result in bigger returns and more cash flow

If you want to know more

Book a 30 min session with me

I’ll help you figure it out

At no cost to you

In a Cash Flow Strategy Review

You can book online here

Look forward to catching you soon
Matt