How to compute the earnings of a business?

Question

I have a small business. A bake macaroons and tarts.. I priced them based on what I've read but I think it's not enough. And how will I know if I'm gaining money?

Is there a process, rules or guide so that it would be much easy. Thanks.

Answer 1

Keep a book of EVERYTHING you spend, and EVERYTHING you earn. Don't leave a thing out. Write down how much you pay for all of the ingredients you buy, if you pay for water, electricity, rent (if you have a little shop). Write it all down. And then write down how much you earn from everything you sell. Do the math, and figure up if you made a profit/if your earnings were negative or positive. If they were negative, try raising the prices a little, because you don't want to lose money! Good luck, and have a great week :D

Answer 2

When you have a business, you have to know not only your revenue, but your expenses. An income statement depicts both of these for a specific duration of time (a week, month, year, quarterly...). Although, this measurement is not without its limitations, such as it doesn't include subjective or assumptive things like developing your customer base. But, it is important non-the-less. Break even analysis: Revenue - Variable Costs - Fixed Costs = Operating Income <--also very important.

Answer 3

1. Add up the cost of the materials.
2. Then take that plus how much profit you want per macaroon.
easy

Answer 4

basically, its P=I-E (i.e. Profit = Income -- Expense)

you have to fill in wat are the factors that constitute the above to determine whether u are making money or not.

best regards
Adi