Free Report #1
"Decisions On How To To Attract Customers...
Can Be Made More Intelligently... When You
Know The Revenue... Profit... And Cash Flow Per
Customer"...
Dear Friend And Fellow Entrepreneur:
Let’s start our discussion on your Free Report #1 without delay.
Now, let’s assume we started a business partnership 3 years ago.
The name of our partnership is Michelangelo’s Gourmet Coffee and Delicious
Sandwiches Restaurant LLC.
And we will assume our business is located in a suburb of Chicago, that is, Arlington
Heights, Illinois.
Note #1: Please visit a local Starbuck’s Coffee Shop in order to understand our
gourmet coffee operation business model.
Note #2: Please go a Panera Bread Restaurant to understand our operation system
provides delicious sandwiches.
Our Target Market is an individual who earn over $100,000 per year…We provide
a premium cup of gourmet coffee and our pricing reflects the world-class quality we
offer.
Now…we will construct a simple financial model using the following forecast for the
next 12 months data:
Forecast Data For The Next 12 Months
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Average Amount Spent Per Customer Per Trip……….
Number Of Trips Per Year For An Average
Customer...…………… …………………
Average Revenue Per Customer Per Year….
Contribution To Fixed Costs…Profit…& Cash
Flow………..…………………
Fixed Costs Forecast………….…………………
Profit Goal For Both Partners…………………
= $12.00
= 75
= $900.00
= 50%
= $500,000
= $250,000
Note: Our profit goal for the next 12 months is $125,000 each.
The question is how many customers are required in order for us
to achieve our financial goals for the next 12 months?
The answer is 1,667customers.
The following is a condensed Income Statement for our business partnership:
Michelangelo’s Gourmet Coffee and
Delicious Sandwiches Restaurant LLC
Modified Income Statement
Forecast For Next 12 Months
Number Of Customers For The Year ………………
1,666.6667
Average Spent Per Customer Per Year …………
$900.00
Total Revenue For The Year ……………………
$1,500,000.00
Total Variable Costs For Servicing The Customers ……
$750,000.00
Fixed Costs Of Doing Business …………………
$500,000.00
Total Costs ……………………………………
$1,250,000.00
Total Costs Per Customer:
$1,250,000.00 divided by 1,666.6667 = $750.00
Profit Before Taxes For 2 Partners ………………
$250,000.00
Profit Per Customer:
$250,000.00 divided by 1,666.6667 = $150.00
Note: Your Master Training Manual for your home-study course
provides you with all the details on how to create an Income
Statement like the one shown above.
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And the calculations are shown in such a simple manner you can input them into
any electronic worksheet such as Microsoft Excel.
Alternatively, you can do them on a blank sheet of 8.5 by 11.0 inch paper.
Also… the numbers can be the foundation for a One–Year Financial & Marketing
Annual Operating Plan.
Please consult any college level textbook on budgeting for a more detailed
explanation.
Please note the profit per customer was $150.00 in the previous example.
And when you have an income statement constructed using
customer activity…then it becomes a Universal Truth that it is
The Customer that drives the profit level for any business that
has a goal of showing a profit.
Now… You Understand Why How To Attract Customers Is
The #1 Skill That Can Make You A Beach-Front Millionaire!
Please understand I feel qualified to speak on the subject… that it is…The
Customer… that drives the profit and cash flow for your business.
Here is my reason.
I have 15+ years experience in cost accounting___ managerial accounting___
product line costing___ inventory accounting___ financial analysis___ financial
budgeting___ capital budgeting___ and financial forecasting.
Note: I have a B.S. In Business and a Masters in Business Administration (MBA) in
Finance and both degrees are from Indiana University, Bloomington, IN.
My experience and skills allows me to say that it is The
Customer That Drives The Profit Model And Your Financial
Fortune.
Also, the cost accounting system___ that separates costs into fixed and variable cost
is called ___Direct Costing. This type of cost system was developed by professional
cost accountants so that executives in the manufacturing industry could have
relevant costs in order to make ___ better informed financial decisions. The end
result was the evolution into A Direct Cost System so that decisions could be made
that would maximize profit and cash flow for the benefit of the owners of the
corporation (stockholders).
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Note: Look into a college level cost accounting textbook and search for Direct Cost
System in the table of contents. You can find additional information on the subject.
Please understand your author worked in a manufacturing plant that produced
diesel engines. A ___finished product (diesel engine)___ required ___70,000___
individual items. A computer print out of all 70,000 items would be approximately 2
feet high.
Also, a finished product required using labor resources___ in135 direct labor
producing___ departments.
Professional Industrial Engineers ___determined the time required per unit of
product___ as the item traveled into the ___finished___ diesel engine. The system
was called The Labor Routing System was one of the essential systems used to create
a standard cost system for the diesel engine and the individual items that went into
the finished product.
Also, to achieve ___the total number of diesel engines required___ to meet customer
demand required the services of ___3,500 employees.
Professional Product Engineers ___defined all the ___necessary components___ that
went into a water pump___ a fuel pump___ an engine block___ and other
components. The system was described as The Product Specification System.
All of the above systems fed into the inventory system.
Trust me___ when I say ___70,000 individual products___ flowing through ___135
direct labor producing department___requiring the services of 3,500 employees___
was not a position for untrained cost accounting professionals.
And I shared a little ___about my cost accounting and financial background___ for
a reason.
I wanted to let you know that I am a ___competent and
experienced professional financial analyst when it comes to
creating A Customer-Driven___ Profit Model for your business or
any other firm.
Note: I worked for Cummins Diesel Company for 15 years. The company is the
world’s largest producer of diesel engines. Cummins had annual revenue in 2011 of
$18.7 billion with 43,900 employees.
The company was founded in 1919 and is headquartered in Columbus, Indiana. The
corporation lost money for the first 19 years it was in business.
Cummins derives approximately 60% of its annual revenue from foreign markets.
Also, the company is known for producing world-class engines.
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A Cummins Diesel will out-perform a majority of the competitive engines when it
comes to fuel mileage, emission standard, reliability, length of life and other factors
that are important to owners of equipment powered by a Cummins Diesel.
If you have ever been in the military, chances are you have ridden in a truck
powered by a Cummins, or a tank powered by a Cummins Diesel Engine.
Currently, the company has 50% of the North American Heavy Duty Market.
YES! The number is 50% and I did not make a typo.
If you count 1,000 of the huge 18-wheelers you see driving on our Interstate System,
then 500 will be powered by a Cummins Diesel.
Note: The above is the end of my discussion about Cummins. I thought you might
appreciate some useful information about a very successful Indiana Corporation
that does not have very much of a name recognition in Main Street USA.
Now___ let’s move to our summary section.
"When It Comes To Making Business And Financial Decisions On The Topic Of
How To Attract Customers... The Entrepreneur Can Make More Intelligent
Decisions When He Knows The Revenue...Profit...And Cash Flow Per
Customer"...
In our example… our Target Market for Michelangelo’s Gourmet Coffee and
Delicious Sandwiches Restaurant was the individual who earns over $100,000 per
year.
And I hope you will take the time to study and analyze the income statement on the
next page and ask yourself the following question:
“Is The Answer To The Question Of How To Attract Customers…
Is It The #1 Skill Required To Become A Beach-Front Millionaire?”
Please go to the next page
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Michelangelo’s Gourmet Coffee and
Delicious Sandwiches Restaurant LLC
Modified Income Statement*
Forecast For Next 12 Months
Number Of Customers For The Year ………………..……..
1,666.6667
Average Spent Per Customer Per Year …………………….
$900.00
Total Revenue For The Year ………………………………..
$1,500,000.00
Total Variable Costs For Servicing The Customers ………
$750,000.00
Fixed Costs Of Doing Business ……………………………...
$500,000.00
Total Costs ……………………………………………………
$1,250,000.00
Total Costs Per Customer:
$1,250,000.00 divided by 1,666.6667 = $750.00
Profit Before Taxes For 2 Partners ………………………….
$250,000.00
Profit Per Customer:
$250,000.00 divided by 1,666.6667 = $150.00
Note: Please click below for more information on your
Millionaire’s Secret Marketing System:
Link connection.
Thank you.
Have a good day.
Dave Wiley
* Copyright @ 2012 Profit Improvement Solutions
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