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Franchise (mom and pop shops)

Break-Even Sales illustration
Planning

Break-Even Sales

Sales dollars needed to cover fixed costs.

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Gross Profit illustration
Income

Gross Profit

Revenue left after the cost of goods sold.

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Inventory Turnover illustration
Efficiency

Inventory Turnover

How many times inventory sells through in a period.

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Labor Cost Percentage illustration
Cost

Labor Cost Percentage

Labor cost as a share of revenue.

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Suggested roadmap

Rental property deal analysis

Run these in order to underwrite a rental or commercial deal end to end.

  1. 1Net Operating IncomeStart with income minus operating expenses.
  2. 2Capitalization RateTurn NOI into a market value / yield check.
  3. 3Property Value from NOIEstimate value from NOI and a target cap rate.
  4. 4Loan-to-Value RatioSize the loan against that value.
  5. 5Monthly Amortization PaymentCompute the monthly debt payment.
  6. 6Debt Service Coverage RatioConfirm the deal covers its debt.
  7. 7Cash-on-Cash ReturnMeasure the cash yield on your money in.
  8. 8Return on InvestmentFinish with the overall return.

Suggested roadmap

Estimate and bid a job

Build a job estimate from materials and labor, then bid and check the margin.

  1. 1Material Cost with WasteTotal materials with a waste allowance.
  2. 2Labor CostAdd crew labor cost.
  3. 3Bid PriceMark up cost into a bid price.
  4. 4Job Profit MarginConfirm the margin on that bid.

Suggested roadmap

Run a coffee, tea, or food shop

The core numbers a small food or retail franchise watches to stay in the black.

  1. 1Gross ProfitStart with revenue minus cost of goods sold.
  2. 2Profit MarginSee how much of each sales dollar you keep.
  3. 3Break-Even SalesFind the sales needed to cover fixed costs.
  4. 4Labor Cost PercentageKeep wages in check against sales.
  5. 5Inventory TurnoverTrack how fast stock sells through.