Profit margin

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Neal Reeves
Junior Member
Posts: 31
Joined: Sat, Aug 18 2007, 9:43PM
Location: Bonifay, FL

Re: Profit margin

Postby Neal Reeves » Wed, Aug 11 2010, 11:09PM

Wow!!! I had no idea that there were geniuses like this in the cabinet business across the states and even around the world. My wife and I have had this business for 15 years and have "just gotten by" over the years. In the late 90's and early 2000's, we had extra which I invested (poorly). I knew that I didn't know much about business, but I had no idea how ignorant I have been. My wife is a wonderful bookkeeper (keeping paper trails and such) but she nor I have business experience. She uses quickbooks and prints the p / l reports at the end of each year for the tax man. In my second year, my tax man told me that if I didn't make some changes, I would be bankrupt in 5 years. I guess that since I am still open for business, I must have changed whatever needed to be changed. My tax man never offered any advice as to what to do other than "make some changes."

Don't get the wrong idea about me, though. We are very blessed and have been for a long time. God has truly blessed my business and I am sure He is the reason that I still have it. I have been praying for financial wisdom and financial blessings and God led me to post my question. I thank God and I thank all of you. I will get my info together and will return. Thanks so much!!!

By the way, Mr. Dan; I meant no offense with the "Mr." I guess I made the assumption about your age based on your intelligence. Of course, the white beard in your picture was a givaway. LOL. I don't know very many wizards, but I would imagine most would be....elders to me.
Neal Reeves
Country Cabinets, Inc.
Bonifay, FL

Neal Reeves
Junior Member
Posts: 31
Joined: Sat, Aug 18 2007, 9:43PM
Location: Bonifay, FL

Re: Profit margin

Postby Neal Reeves » Wed, Aug 11 2010, 11:12PM

Check this out!!!! After associating with y'all for this very short time, suddenly I am a Junior Member instead of a New Member!!!! Y'all are amazing!!!!!
Neal Reeves

Country Cabinets, Inc.

Bonifay, FL

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Neville Bastian
Guru Member
Posts: 589
Joined: Fri, May 20 2005, 6:48PM
Company Name: Classic Cabinetry
Location: Albany Western Australia
Contact:

Re: Profit margin

Postby Neville Bastian » Wed, Aug 11 2010, 11:55PM

Hi Neal,
I guess you maybe one of those industrious workers the Bible does speak about. Sounds like your wife is the one who gets up early each morning to get the family home operational.
If I can be bold to make one more bit of advice and that is when things get better and you start making a modest profit is purchase a industrial property and set-up business from there. The reason is you can use the payments as a business expense, over time you pay the industrial property off and hopefully extend it size as you grow. When you retire you will have a good investment and something that will generate a income. I made the mistake of renting for 20 years paying off someone else's investment 2 times with the rent rising each year.
The advantage of the workshop is you can design it to suits your needs with showroom and working area.
I have spoken to many business people who say they don't make money when they retire from their business but more likely their real estate value. That is why some are willing to pay twice the amount in workshop mortgage than rent. Within 6 years you are likely to be level pegging then after that your mortgage is less than rental. That's the case in Australia but your US property values seem pretty low.
Thanks

Neville
Neville Australia

Neal Reeves
Junior Member
Posts: 31
Joined: Sat, Aug 18 2007, 9:43PM
Location: Bonifay, FL

Re: Profit margin

Postby Neal Reeves » Thu, Aug 12 2010, 10:39PM

Thank you so much for all the great advice. I have briefly read through some of the article that Mr. Kerry linked to me. Very educational!! Business classes are a great idea and I intend to register very soon for one. I hope that I can get my wife involved as well. Speaking with her earlier today, she isn't as anxious to go back to school. I think, with all of your helps, we will convince her!! Mr. Neville, I have considered moving my business away from home and have been very tempted to do so, but it is also very convenient to go right out the back door to work. I am sure it would be in my best interest, though. What is "level pegging?" I really have to exercise these new terms and spread them around.

To all of you Wizards, Gurus, and Seniors: Thank you all!! I am still collecting data from times past to try to see, financially, where I am currently and where I have been for the last 15 years. I will post more info asap in hopes of receiving more guidance from you all!!
God Bless!!!
Neal Reeves

Country Cabinets, Inc.

Bonifay, FL

User avatar
Neville Bastian
Guru Member
Posts: 589
Joined: Fri, May 20 2005, 6:48PM
Company Name: Classic Cabinetry
Location: Albany Western Australia
Contact:

Re: Profit margin

Postby Neville Bastian » Thu, Aug 12 2010, 11:57PM

Hi Neal, Level pegging is when your workshop loan equals what the rent cost is. Each year the rent goes up but your workshop payments don't. It takes 6 years for things to even out. After that your competitors who rent are at a disadvantage. Most times you can't move out due to the moving costs.
Do a positive and negative chart to see if its worth while
Regards

Neville
Neville Australia


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