I have seen a lot of businesses recently offering a proportion of sales or profits to the bushfire appeal, and seen\/heard various discussions about this. What thing that has stood out to me is that not everyone understands what a profit actually is, so I think it’s time to discuss it!<\/p>\n
The concise Oxford dictionary gives the following definition…<\/p>\n
profit:<\/strong><\/span> 1. advantage, benefit 2. pecuniary gain, excess of returns over outlay.<\/p>\n Or as a verb, it defines it as bringing or being of\u00a0advantage.<\/p>\n Profit is different to proceeds or turnover which is the total amount of money coming into your business from customers. If you sell 10 items at $50 each, your turnover is $500 but your profit could be a lot less.<\/p>\n Simply put, profit is the money left over once you have paid all your business expenses. Or\u00a0you can view it as\u00a0profit =\u00a0turnover – expenses.<\/strong><\/p>\n So continuing from the above example, if each item costs you $20 to make and your overheads are $10 per item, your expenses are $30 and you will make $20 profit on each item. So from a turnover of $500 you will make $200 profit.<\/p>\n Expenses are everything your business spends money on to conduct business. As well as obvious costs such as materials and equipment to make products or products from a supplier, it includes what are known as overheads – the cost of electricity, marketing and promotions, staff, office\/shop space, insurance, registrations, legal fees and so on.<\/p>\n Getting back to making donations as a business, ‘100% of profits’ would mean a $200 donation from the sale of 10 items whereas a ‘100% of proceeds’ would mean a $500 donation.<\/p>\n","protected":false},"excerpt":{"rendered":" I have seen a lot of businesses recently offering a proportion of sales or profits to the bushfire appeal, and seen\/heard various discussions about this. What thing that has stood out to me is that not everyone understands what a profit actually is, so I think it’s time to discuss it! The concise Oxford dictionary […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[53],"tags":[297,396,854,625,906],"class_list":["post-604","post","type-post","status-publish","format-standard","hentry","category-business-info-tools","tag-definition","tag-money","tag-profit","tag-sales","tag-turnover"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t