How to calculate turnover

The entrepreneur organizes a new business, you must have a very clear idea about what would be the profit of the company and what costs it will incur, and, consequently, that must be it financial or product turnover. Without these suggestive findings business start up is risky.

Instruction

1. To plan the expected company's turnover, or, in other words, the estimated quantity of goods or services that will be implemented, it is advisable to take note of the existing experience, gained in a similar (similar in profile) enterprises.
2. After completing the calculation of the commodity or financial turnover over a certain period of time and determining which costs will occur to ensure this turnover, by computing the difference between the first and second, you will designate the profits that will bring the company.
3. For more detailed calculations use the classical scheme: from the estimated annual amount (monthly, quarterly – whatever you like) turnover subtract the amount of funds required for the purchase of goods in this period (it's usually 60-70%). Don't forget also in the list of regular expenses include payment of salaries of employees, rent of premises, cost of transportation, insurance, communications (Fax, telephone, etc.), depreciation, and repair of equipment, taxes, legal advice. Resulting from all of the major deductions, the result is a profit.
4. If preliminary calculations show a lack of profit or cost superiority over the circulation, measures must be taken to reduce costs or find additional source of income. As a means to increase the income of the enterprise can be recommended to conduct an advertising campaign. Experience shows that financial and commodity turnover after its implementation far exceed the flow of funds spent for these purposes.
5. From the project implementation should be avoided, if measures to reduce the cost of their dominance over the trade, it would be impossible for the enterprise.