Avowal Greens’ Post

🤔Imagine you have a lemonade stand and want to sell more lemonade. 📈Growing your business is like making your lemonade better, finding the best spot for your stand, and getting more people to know about it. It's about growing your business over time. Getting quick results is like putting up signs to attract people to buy 🍸lemonade right away. It's about making sales happen quickly. Both ways aim to sell more lemonade🍸, but one is about long-term growth, while the other is about quick sales. #MarketingExplained #BusinessGrowth #InstantSales #digitalmarketing #LemonadeStandSuccess #SimpleMarketing #growth

Beyond the Numbers: ꜱᴀʟᴇꜱ ʀᴇᴠᴇɴᴜᴇ ᴀɴᴅ ᴘʀᴏꜰɪᴛ ᴍᴀʀɢɪɴ. Imagine running a lemonade 🍋 stand. Your sales revenue would be the total amount of money you collect from selling lemonade throughout the day. 🔹 𝐍𝐨. 𝐨𝐟 𝐜𝐮𝐩𝐬 𝐬𝐨𝐥𝐝 𝐱 𝐏𝐫𝐢𝐜𝐞 𝐩𝐞𝐫 𝐜𝐮𝐩 The profit margin is the percentage of your sales revenue that remains as profit after subtracting all your expenses like lemons, cups, water, and other related expenses. 🔹 (𝐏𝐫𝐨𝐟𝐢𝐭 / 𝐒𝐚𝐥𝐞𝐬 𝐑𝐞𝐯𝐞𝐧𝐮𝐞) 𝐱𝟏𝟎𝟎 In essence, revenue focuses on the total income and the amount of sales While profit margin focuses on the profitability of that income by considering all expenses and costs. However, in business, the usefulness of these metrics is not in knowing how to calculate them. But by understanding how they affect your business, product performance, and customer preferences, For instances... Your lemonade generates more revenue than other products but has a low-profit margin. This represents both a benefit and a drawback. ☑ ☑ ☑ ʙᴇɴᴇꜰɪᴛ: High revenue represents a strong customer base and the potential for more growth ❌ ❌ ❌ ᴅʀᴀᴡʙᴀᴄᴋ: This means you are earning less profit from this product, and if the high revenue is not enough to compensate for the associated costs or expenses, it will affect the business's profitability and growth in the long run. ---------------------------------------------------------- So, the next time you hear about a company's revenue, remember to ask about its profit margin too! 📌 A deeper understanding of these financial metrics empowers you to make informed decisions as a customer, investor, or aspiring entrepreneur. ---------------------------------------------------------- 🔷 Do you find this useful? 📣 Feel free to repost and share ⏩ Follow Francis Balogun for more insightful posts. #businessacumen #businessanalytics #salesanalysis #profitfirst

🍋 Lemonade Stand Business Tip: Understanding Gross vs. Net Profit! 🍋 Let’s break down the difference between gross profit and net profit using our lemonade stand as an example. 📊 🔸 Gross Profit: This is the money you make from selling lemonade, minus the cost of the lemons, sugar, and cups. It’s your sales revenue minus the cost of goods sold (COGS). Example: You sell lemonade for £50. The lemons, sugar, and cups cost £20. Your gross profit is £50 - £20 = £30. 🔸 Net Profit: This is your gross profit minus all the other expenses, like rent for your stand, marketing costs, and any other miscellaneous expenses. It’s what you actually take home. Example: From your £30 gross profit, you subtract £10 for rent and £5 for marketing. Your net profit is £30 - £10 - £5 = £15. So, while gross profit shows how much money you’re making from your products, net profit shows how much you’re actually earning after all expenses. Understanding these differences helps you make better decisions and see the true health of your business. 💡 #BusinessBasics #GrossProfit #NetProfit #LemonadeStand #FinancialEducation #MoneyMatters #UKBusiness

At Get Smart Accountants, we're on a mission to demystify the often-complex world of accounting. We understand that the jargon and terminology used in our industry can be daunting for many business owners. That's why we are committed to breaking down these terms into simple, easy-to-understand language. Our goal is to empower business owners with clarity and confidence, helping to navigate the financial aspects of business with ease. Today, let's dive into your "Break-Even Point." 🤔 Picture this: you have a lemonade stand. You buy lemons, sugar, and cups to make and sell your delicious lemonade. 💡 What exactly is the break-even point? It's like a magic moment for your lemonade stand. It happens when you've sold enough cups of lemonade to pay for all the lemons, sugar, and cups you initially bought. Let's simplify it: Your expenses for lemons, sugar, and cups are £10. 🍋 You sell each cup of lemonade for £1. Your break-even point is when you sell 10 cups! After selling the 10th cup, you've made back your £10. Now, every cup after that, like the 11th, 12th, 13th, starts earning you money. Knowing your break-even point is super helpful in business. It tells you when you start making a profit! #FinancialLiteracy #BreakEvenPoint 

Decoding Operating Income Let’s go back to your lemonade stand. After selling cups for $3 each and covering the direct costs (lemons, sugar, and cups), you still have other expenses to think about—rent for the stand, wages for employees, and marketing costs. These are called operating expenses. Why Operating Income Matters in Stock Evaluation Operating income, or operating profit, is calculated by subtracting operating expenses from gross profit. It’s a key measure of a company’s profitability from its core business operations, excluding non-operational items like interest or taxes. It's a pure measure of how well a company’s main activities are generating profit. A growing operating income usually means: -Improved Efficiency: The company is keeping costs in check while increasing sales. -Scalability: As the business grows, it can cover fixed costs like rent and salaries more easily, increasing profits. --Strong Core Business: The company is thriving at its core activities without relying on external factors like investments or one-off gains. A shrinking operating income can signal: -Rising Operating Costs: Expenses like wages, rent, or marketing are increasing faster than revenue. -Operational Inefficiencies: The company might be spending too much on non-essential areas, eating into profits. -Weakened Demand: Declining sales while costs remain steady can shrink operating income, showing potential trouble with the business model. Case in Point If our lemonade stand’s rent or wages increase but we don't sell more lemonade, operating income drops, showing that costs are cutting into profits. On the other hand, if we scale up by selling more lemonade without drastically increasing costs, operating income rises, reflecting stronger operational performance. #Investing #StockMarket #FinancialMetrics #OperatingIncome #Profitability #CorporateFinance #BusinessStrategy #LemonadeStand

The lemonade was good, but the lesson I learned was even better! I passed by a stand where a 13 year old entrepreneur was hustling to sell his lemonade with a big smile on his face—even though most people just walked by. I stopped, bought 5 lemonades, and took just one. I told him the other 4 were for the next people who walked by but didn’t have money. He lit up and thanked me, but as I watched for a few moments longer, the next few groups of people still walked past, declining the free drink, some ignoring the kid entirely. It struck me—this wasn’t about price. His lemonade wasn’t expensive. This was about value. In business, we often get caught up trying to compete on price. But this experience reminded me: it’s not about being the cheapest option; it’s about creating a connection to what people truly value. When you sell, don’t sell a product or a service at a “bargain.” Sell the impact it will have. Sell the outcome your audience is looking for. The 13-year-old wasn’t just selling lemonade; he was selling good vibes and a refreshing treat. If you’re building something—whether it’s a product, a service, or anything really —focus on showing others the difference it can make for them. That’s what truly gets people to stop and buy in. What lessons have you learned from unexpected places like this? I’d love to hear your thoughts.

Imagine this: you're a kid again with the best lemonade stand in town. Business is booming, everyone loves your lemonade, and you're making deals left and right with all the thirsty customers in the neighbourhood. It feels like nothing can go wrong. Then, suddenly, it starts to rain. Not just for a day, but for what seems like forever, putting a pause on your booming business. Luckily, your parents have your back, giving you an allowance to tide over the rainy days. When the sun finally comes back out, and you're ready to sell lemonade again, things start to get tough. Lemons have become hard to find and are more expensive than ever. The cost of sugar has gone up. Paper cups too. And don’t get me started on the price of ice! As if that wasn't enough, your friend decides to start his own lemonade stand and even convinces your little brother to work for him instead of you with the promise of two whole bags of lollies. TWO bags of lollies! How are you supposed to compete with that? And remember those big deals you were so excited about? You promised your customers a low, fixed price that they won’t budge on. …now with the cost of everything going up, it feels like *you’re* the one being squeezed. In an effort to make ends meet, you find yourself trying to sell more and more lemonade. Sure, you get busier. But that only makes things worse. One day, you're hit with the harsh reality: You arrive at your stand to discover no lemons have been delivered, your buddy hasn’t showed up to squeeze, and your customers are thirsty and unimpressed. Of course, this isn’t *really* about a lemonade stand. It’s about the human element often forgotten amidst the “construction crisis”. Behind the headlines are people facing tough times. Tougher than many of us can imagine. Yes, there are a few who might not play fair, but they're the rare exception. Most are just trying to get by in situations we wouldn't want to find ourselves in. It's about recognising the faces behind our suppliers, understanding their struggles, and remembering that, at the end of the day, we're all striving to do our best under sometimes immensely difficult conditions. Business is tough, at times unfair, and success is never assured. This understanding should guide us toward more empathetic, informed, and cooperative financial decisions. Early identification of potential issues allows us to develop practical, risk-mitigating solutions that not only support but uplift our hardworking and loyal suppliers. It’s about cultivating supplier relationships grounded in understanding, transparency and empathy.

Don't memorize just understand the logic behind the formula. Let's understand The Contribution Margin in a unique way so that we do not forget it. Imagine you have a lemonade stand. Every time you sell a cup of lemonade, you earn some money (let's say 5 coins). But to make each cup, you have to spend 2 coins on things like lemons and sugar. So after you pay for the lemons and sugar, you have 3 coins left from each cup you sell. Those 3 coins are your contribution margin. This means: 5 coins (from selling lemonade) - 2 coins (cost to make it) = 3 coins you keep to cover other things, like paying for your stand or even saving up for toys! In other words, it’s the part of your money that helps you keep your stand running and maybe even save some extra! Now you do not have to memorize the formula. you can easily understand Why Contribution Margin=Sales Revenue−Variable Costs. The Contribution Margin is a financial metric that represents the portion of sales revenue that exceeds variable costs. It’s a critical figure in cost-volume-profit (CVP) analysis, as it helps businesses understand how much of their revenue is available to cover fixed costs and ultimately contribute to profit. #Analysis #Financialdata #CosVolumeProfit #CotributionMargin #