When Sales Can Wreck Your Business (and how to see it coming)
Presented by Frank Coker, CEO of Corelytics and Finance Professor at the University of Washington iSchool
Falcon Invoice Discounting: Unlock Your Business Potential
When Sales Can Wreck Your Business
1. Presented by:
Frank Coker, CMC, MBA
CEO
CoreConnex, Inc.
Producer of the
CorelyticsTM Financial Dashboard
When New Sales Can
Wreck Your Business
And how to see it coming
3. Agenda
• The Myth
• Gross Margin and Profit
• LOB Performance
• Business Models
• Benchmarks
• Key Trends
• Look Ahead
• Monthly Process
• Q&A
4. The Myth
More sales are always good for business, right?
Why not?
– Sales with a negative margin destroy companies
– Increasing sales in an LOB with declining margins
may increase losses at faster rate
– Sales volume is often not as important as margin
– There will always be a leader and a laggard LOB
5. Gross Margin
Gross Margin = Revenue - COGS
COGS (Cost of Goods Sold a.k.a, direct costs)
• Cost of Sales • Direct labor
• Materials – Billable Staff
(product costs) – Contractors
6. Profit
Profit = Gross Margin - SG&A
SG&A
(Sales, General and Administrative expenses, a.k.a., “overheads”)
• Admin payroll • Legal
• Marketing • Training
• Rent • Taxes
• etc.