By Barbara R at July 11 2019 12:47:00
Why do you need to know these percentages? As your sales increases or decreases, your material cost, labor cost, and variable expenses will track accordingly. They will track very close to the same % as your current business. As an example, let's say your current sales is averaging 贄ꯠ per month and your material cost is averaging ฤꯠ per month. That's 20% of your sales (ฤꯠ ÷ 贄ꯠ = 20%). So, what would your material cost be if your sales were averaging 赨ꯠ per month? It would still be 20% but it would be 20% of 赨ꯠ or ุꯠ. So with these percentages, you can project your material, labor and variable expenses. See how it works?
It does not have to be long or overly complicated. It simply has to have the elements required to put your goals into action. Developing a SWOT analysis (strengths, weaknesses, opportunities, threats) will help you to identify problems before they start. Craft your own or hire a business writer to create a dynamic plan that will guide your operations. An effective plan is one of the most important elements over overall business forecasting.