How to Compute Profit Margin and Markup

How to Compute Profit Margin and Markup

Figuring out when you're making a profit is key to business success.

One of the most important financial concepts you will need to learn in running your new business is the computation of gross profit. And the tool that you use to maintain gross profit is markup. The gross profit on a product sold is computed as:

Sales - Cost of Goods Sold = Gross Profit

To understand gross profit, it is important to know the distinction between variable and fixed costs. Variable costs are those that change based on the amount of product being made and are incurred as a direct result of producing the product. Variable costs include:

Read the full article at entrepreneur.com


Things you can do to make your sari-sari store profitable.

Fast facts
In a neighborhood where there are many other sari-sari stores, the important thing is for your store to be different from the others. Study how you can make it stand above the rest by answering the following questions:
• Who are your most likely customers?
• What time do the other stores open and close?
• What items do you sell at the moment, and which ones provide the biggest profit?
• Can you lay down some ground rules, like a “no credit” policy?
In a neighborhood of many competitors, the trick is to make your sari-sari store different from the rest.
Q: After selling our passenger jeepney, my Mother used our garage for a sari-sari store which she opened six months ago. This is the latest addition to the six in our vicinity. I don’t think it’s making that much, and I want to help. What can I do?
— A. Sta. Maria, Manila
A: How different is your mom’s sari-sari store from the rest? We presume not much. So let’s start with your neighborhood. Since you know this better than we do, answer the following:
1. Who are the most likely customers? Are they mostly children, teenagers, college students, or professionals who are bed spacers? What are their usual needs? Stationery? Cooked food for dinner? Baon for school? Non-prescription drugs for fever or headache? If no one carries these, you might want to suggest these to your mom.
2. What time do the other stores open or close? Perhaps your mom can open earlier or close later than these do.
3. What items does your mom sell at the moment? Spend some time on this. You may find out that only 20 percent of her merchandise provides 80 percent of the profit. Remember, you only realize profits when goods are sold, not when they’re kept in inventory. So, what do you do with items that don’t sell?
4. Can your mom get these “20 percent” at bigger volumes so she can get price discounts? This way she can increase her profits. And who knows, she may even be the supplier of the other stores for specific items like cigarettes.
5. Additionally, can your mom easily replenish these so she doesn’t experience stock-outs? Remember, if she doesn’t have the item being sought by the customer, she has lost a sale.
6. Can you agree on some ground rules, like a “no credit” policy? This is to ensure that your mom’s store has enough cash to pay for necessary purchases. Or, like a listahan for anything that is bought and sold? Even those items (or even cash) taken by you and your family for personal use? This way, you’ll know which items are fast- or slow-moving and how much the store has sold for each day. And this way, your family does not treat the store’s kitty as a personal piggy bank.
7. Can you and the rest of your family pitch in during their free time so your mom can do other things?
We hope you find some of these pointers useful. The important thing is for your Mom’s sari-sari store to be different from the others.

Make The Family Business Work

By Ellen Desear-Espiritu
Conflicts are common in a family business because of blood relations and the thin line dividing personal and business affairs. The size of the business does not matter: the same resentments and jealousies simmer or boil over whether the business is a small company or a conglomerate with a huge holding firm.
The operations manager, a nephew, may resent the new sales manager, a cousin, for drawing a bigger salary or receiving more perks. The assistant vice president, a son, may hate a younger sibling because the upstart is being groomed to take over from the patriarch.
The resentments come to a head when the family fails to separate blood ties from strictly business concerns, according to Fernan Lucban, director of the University of Asia and the Pacific’s Entrepreneurial Management Program. “The task here is to make a successful shift from running a family business to building a lasting corporate organization,” he says. Family members can avoid conflict by agreeing on key issues such as the business’ direction, their specific roles in the company, and the rewards each of them may expect.
Mila’s Lechon matriarch Antonina Cesario credits discipline and a common goal for the success of the 30-year-old business with 37 stores in Metro Manila. A strong work ethic binds the siblings together. “Matagal na kaming nagne-negosyo,” says Cesario, 70, a pharmacy graduate. “Bata pa kami tinuruan na kaming lahat na magkakapatid na magtinda. May kaya ang mga magulang namin pero hindi kame pinayaman sa pera kundi sa disiplina, tipid, sipag at tiyaga. Kung hindi naturuan nang husto ang mga bata na magnegosyo, siguro walang nangyari.”
What else should you do to make your family business a success?
• Ask if the business is progressive. If not, know why and then make it more efficient and forward-looking, says Lucban.
• If your business is candle making, don’t stop at making candles but start selling the candles yourself, putting up more stores, and producing related products. Mila’s Lechon started with vegetables and fruits. “Nung nagtitinda pa lang ako ng prutas, ang aim ko noon magkaroon ng malaking puwesto para sa karinderya,” Cesario says. “Nung magkaroon ako ng karinderya, sabi ko magtitinda ako ng lechon. Ngayong meron na akong lichunan, sabi naman ng anak ko tignan namin ‘yung potential na mag-franchise.”
• Have a vision and get all family members pulling together to realize it. “You need a competent performing team,” Lucban says. Johnlu Koa, owner of the 25-chain French Baker in Metro Manila, got the idea for an upscale bakeshop from his father. The idea took from when he observed how people ate bread in Europe and he decided he could transplant the culture in Manila. “I was 30 at the time and torn between teaching and doing business with my family,” he says. “I was really inspired by my parents to make that bakeshop business come true, so I did!”
• Ensure orderly succession. One of the most common causes of family business failures is poor succession, says Lucban. A family business must prepare the next generation. At Mila’s Lechon, Cesario tasked family members with responsibilities before they reached high school. “Ngayon, meron akong isang anak na tagapamahala kung paano i-manage yung business nang sila-sila lang. Dapat nga retired na kame, pero titingnan ko pa rin yung mga bata.”
• Be there for the long haul. Whether your family business is new or has been there for as long as you can remember, plan ahead. Set your goal and then support it with clear and workable strategies. Ask yourself in what business you want to be in the next five, 10, 15, and 20 years. What do you want to be known for? The fastest growing company? The most profitable? The most caring? What competence do you have and what else do you need to develop?
• Be professional. Separate family concerns from the business. “You know that not all members of the family end up as managers or president of the company,” says Lucban. “One member might have the drive but not the skill to do things. The participation of a less qualified family member will only bring down the reputation and value of the business.”
So what do you do when push comes to shove and you must decide between pleasing relations and making the business work? The solution is not easy, but it will come to you. Sleep on it and it will come to you.
Are Millionaires and PhDs Really Smarter?
Millionaires and PhDs are not smarter or better than the rest of humanity. But there is one major difference: Confidence! Because of their situation, they feel much more secure about the future.
So, if millionaires aren’t smarter, why do they have a lot more money than most of us? A few reasons come to mind:
• People with money often inherit it. Or, they inherit the opportunities that come from their families having money. This often includes access to a network of well-heeled businessmen and investors.
• They are in the right place at the right time. For example, during Microsoft’s heyday, many employees became millionaires and retired after working with the company only 5 years.
• People who make millions from the ground up, from their own efforts, are rare and usually have a good business sense. Most millionaires aren’t in this category.
And, if people with advanced college degrees aren’t really smarter, they must have something (besides confidence). So, what is it?
• They have the financial resources to pay for college, whether from their family’s savings, financial aide, or working their way through school.
• They usually have good memories, or at least a good short-term memory that enables them to memorize numerous facts they promptly forget after the exams are over. (Most educational systems still reward good memories over the ability to analyze and creatively solve problems.)
• They have a certain amount of discipline. (Or, they hire ghostwriters to write their masters theses and doctoral dissertations for them! Yes—some people do this!)
Life circumstances, including those that evolve from the choices we make, can make a big difference. For example, when people get married or have children at a young age, it limits their opportunities for going to school. Sometimes people must take care of disabled family members or younger siblings. There are many life events, some unforeseen, that can make it nearly impossible for someone to complete a college, or even a high-school, education. But most of these have nothing to do with intelligence.
So! If you have been feeling “less than” because you don’t have a degree, an advanced degree, or a million dollars in the bank, please stop beating yourself up. Most likely, you are just as smart as the next person. You are just on a different path.
- by O’Vivian, a versatile author and artist who believes that art has the ability to help heal, and inspire, the soul
How to Grow Guyabano (Soursop)


Guayabano, guyabano or soursop in English (Anona muricata Linn.) is a small tree about 5 to 7 meters in height. The leaves are alternate, oval in shape, pointed at both ends, smooth and shining, 7 to 20 centimeters long and with petioles about 5 millimeters long. The flowers are large, yellowish or greenish yellow and solitary. There are six large, fleshy or leathery petals in two series. They are heart-shaped, with pointed tip, and up to 5 centimeters in length and 3 centimeters in breadth. In the center of the flower is a cone-shaped mass of many carpels which will form the fruit, and below this are very numerous stamens.

A native of tropical America, was introduced into the Philippines at an early date and is no cultivated in all parts of the Archipelago.

Guyabano is a green, soft spine, pea-shaped fruit with a sweet-sour flavor. It weighs about two to five kilos. The skin is thin and its flesh is a white, soft fibrous pulp which has a very agreeable flavor but rather sour. Its mature, green fruit is used as vegetable and made into sweet meats, while the ripe fruit is eaten raw or for dessert.

A lot of concoctions can be made into guyabano like delicious sherbets, ice drops and fruit drinks. An assortment of punch and cocktail drinks can be made by mixing the nectar with wine rum or cola drinks or buko (fresh coconut) juice and ice.

There are two strains of guyabano: the sweet and the ordinary. Both have the same botanic description. The former, however, tastes sweeter than the ordinary. Belonging to the family Anonaceae, other familiar fruits beside guyabano are atis (Anona Squamosa or sugar apple), anonas (Anona reticulata or custard apple), and atemoya (Anona).

Nutritive Mineral Content of Guyabano

Guyabano fruit is an excellent source of vitamins B and C. However, it is deficient in Vitamin A, calcium and phosphorous. Below is the mineral content analyses of the fruit:
• Moisture
• Ash
• Phosphorous(P20)
• Calcium (CaO)
• Iron (Fe2O2)
• Proteins
Soil and Climate

The plant grows in any kind of soil, but a fairly deep, friable soil of volcanic origin is conducive to growth & fruiting. It thrives very well from sea level up to 500 meters above sea level. It is best to plant them at the start of the rainy season.

Method of Propagation
• Grafting
• cutting
• marcotting
• budding
Note:
1. Refers to time from field setting to first harvest. Asexually propagated plants generally mature about twice earlier than plants grown from seeds.
2. Computed on the bases of distance of planting given for each crop.
Fertilization Guide

-----------------------------------------------------------------------
Recommended Rate of
Age of Plant N-P-K (kg/hectare) Method of Application
------------- --------------------- --------------------------------
Planning time 250-300 gms. Complete Apply 3 inches below the roots
fertilizer (14-14-14) and 5 inches to side of seedling
or (12-24-12) at planting. 8 cm. below roots
and 10 cm. to the side.

Young trees 300-500 gms. of com- Mix and apply in two equal doses
(1-3 years) plete fertilizer (14- by digging along periphery of
14-14) or (12-24-12) the tree. 1st application- start
plus 200-300 gms. of rainy season. 2nd application
Urea (45-0-0) - end of rainy season.

Bearing trees 0.5-3 kg. complete - same as above -
fertilizer plus 200-
300 gms. muriate of
potash (0-0-60)
-----------------------------------------------------------------------

Disease Control

Anthracnose is the most common disease of guyabano, cause by a fungus and transmitted by means of wind-splashed rain and contact with infected fruits. Spray flowers and developing fruits with any following:
• Benlate at 2-4 grams per gallon of water
• Manzate at 6-8 grams per gallon of water
• Shell Copper Fungicide at 14-1 grams per gallon of water.
Pink disease is caused by a fungus and infective material is the common mode of transmission.

Symptoms: appearance of cracks on trunks or branches and secretions of gums; affected area covered with a thick mass of pink mycelia during the rainy season; drying of mycelia during dry weather with color changing to dirty white or gray eventually leading to die-back condition.

Control
1. Prune and burn infected branches and twigs.
2. Disinfect by spraying with copper fungicide or lime-sulfur mixture
3. Keep orchard clean of any source of infections.
Maturity

Fruits are mature when they become dark and shiny green with recurved spines set far apart and the skin appearing to burst with pressure from within. Ripe fruits are light yellow and soft.

Medicinal Value

The guyabano fruit is use as a cure for cough, scurvy and fever. It contains Vitamin A, calcium, phosphorous and rich with vitamin B and C. It also contains 11.62 percent sugar, mostly glucose and fructose. The green fruits and seeds can induce vomiting, remedy dysentery and arrest secretion or bleeding.

The sap of the young leaves may be applied directly on pimples to induce suppuration. The sap is also considered parasitical. An alcoholic extract of the leaves, when distilled with steam, yields a small amount of essential oil. The portion of alcoholic extract which is soluble in water contains a large amount of potassium chloride together with dextrose tannins, amorphous products, and a small amount of an alkaloid substance which could not be crystallized. The leaves and roots also cure colic and convulsions.

Related post: Processing of Guyabano (Soursop)


GUYABANO ADE

Ingredients
• 1 kilo ripe guayabano
• 4 cups water
• 3/4 cup sugar
• Calamansi juice
Procedure:
1. Wash and peel fruits. Remove the core and seeds. Then cut pulp into small pieces.
2. Heat in four cups water. Cool. Strain mixture through a clean cheese cloth into a pitcher, then squeeze the juice.
3. Add sugar and enough calamansi juice or make the mixture a little sour. Serve with ice cubes. Add more sugar if desired.

GUYABANO NECTAR
1. Wash and peel guayabano. Remove core and seeds. Cut into small pieces. Mix two cups water for every three cups of pulp.
2. Pass guayabano pulp through a juice extractor or a corn mill grinder. Add little by little so juice can be fully extracted.
3. Strain through a stainless steel strainer. Measure extracted pulp juice and add one cup of water for every two cups juice. Add one cup sugar for every 3" cups of pulp mixture.
4. Pass sugared mixture through a juice mixer or beat with a rotary egg beater. Place the mixture in an enamel casserole or a stainless steel kettle, and cook until it simmers. Do not let it boil. Lower the heat and stir from time to time until mixture become thick.
5. Pour cooked mixture into tall tin cans while still hot, leaving 1/4 inch space on top of the mixture.
6. Seal the cans and place them in a pressure cooker for 15 minutes at 10 pounds pressure.
7. Cool and label.
Related post: How to Grow Guyabano (Soursop)