Gross profit? You mean after the cost of the ingredients is taken out, or all materials? I think that my ingredients are usually less than 10% of the total money I bring in per week, but once you take out self-employment taxes and all other expenses I'm not making a 90% profit on each cake!
Last year my taxable profits were about 58% of everything I brought in.
That counts EVERYTHING though...all expenses, things I had to buy to keep my business going, insurance, web costs, any equipment, donations, any business losses, etc. And then of course I did have to pay taxes on that 58% as well as self employment.
I'm not sure that gross profit is a good indicator. That's Selling Price Less COGS (cost of goods sold), i.e. ingredients only. But that's not the full cost of the cake. And those add'l costs can vary depending on location and overhead.
I've helped a few people really look at their costing. It's always amazing to them when they see that what they THOUGHT they were making is no where NEAR what they are really making, once they figure all of the other very real and very expensive costs involved.
I'm not sure that gross profit is a good indicator. That's Selling Price Less COGS (cost of goods sold), i.e. ingredients only. But that's not the full cost of the cake. And those add'l costs can vary depending on location and overhead.
I've helped a few people really look at their costing. It's always amazing to them when they see that what they THOUGHT they were making is no where NEAR what they are really making, once they figure all of the other very real and very expensive costs involved.
No kidding. Alot of money changed hands last year, unfortunately the majority of it was NOT "mine"!!! And actually I did my math wrong...my net/taxable profit was only 42%...not 58%. Duh. haha.
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