Questions

Is a 1.6% profit margin good for a year in the dental lab industry? That is with paying all employees and the owner... What is a good profit margin?

Total income : $456,030.25 Net profit: $7,514.19

3answers

That is a LOUSY return. You'd be better off putting the money in a savings account in the bank.

I do not know your industry well, but in mine (Marketing Agency) I aim for a net profit of 15% after paying corporate taxes, wages and all overheads.


Answered 6 years ago

Dear Fledgling Entrepreneur,

Cheers to making a profit! Industry statistics are everywhere for you to find. I think you'll see anything above 6% and below 30% would be better. Running a business is difficult and you have cashflow. This is great. Now it's time to look at inflow and outflow to make massive improvements.

Here's one direction to go next - call me and we'll discuss.

1. Get financial controls - particularly with an Income Statement. Use it to see the particular activities (expenses) that are bringing in the revenue the most. You are spending money in certain areas to earn the most money -- so make decisions to exploit that insight. Think about the 20% of action that is bringing the 80% of revenue.

2. Fully utilize an online presence. An online presence is a 24/7/365 store, sales tool, lead generator...it never sleeps and is always open. As a marketing channel, it has one of the best ROIs - this is my specialty. Use this to your advantage and you will find that leveraging the Internet will increase your bottom line. Call me up and we can discuss all the opportunities available to generate immediate cash.

Cheers --
Nick


Answered 6 years ago

This will depend on what portion of your business is cash pay and what is insurance reimbursement based on your contracted rates.


Answered 6 years ago

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