\ud83d\ude4f Thank you to everyone who took part.<\/p>\n
The results show that the gross versus net mix-up is one of the most common mistakes in small business.<\/p>\n
Correct answer: $30<\/p>\n
Total votes: 269<\/p>\n
$23 \u2192 125 votes (46.5%)<\/p>\n
$30 \u2705 Correct \u2192 61 votes (22.7%)<\/p>\n
None of the above \u2192 22 votes (8.2%)<\/p>\n
$70 \u2192 20 votes (7.4%)<\/p>\n
$28 \u2192 19 votes (7.1%)<\/p>\n
$20 \u2192 12 votes (4.5%)<\/p>\n
$25 \u2192 5 votes (1.9%)<\/p>\n
$65 \u2192 4 votes (1.5%)<\/p>\n
$63 \u2192 1 vote (0.4%)<\/p>\n
Gross profit is simply your sales minus what the goods cost you, nothing else. You sold the jackets for $70 and the jackets cost you $40, so $70 minus $40 = $30. The $2 transport and the $5 stall rental are operating costs. They are taken out after gross profit to give you your net profit of $23. So $30 is your gross profit, and $23 is what you actually pocket.<\/p>\n
The trap caught nearly half of you: 125 people (46.5%) chose $23. That is the net profit, not the gross profit.<\/p>\n
Only about 1 in 5 got it right: Just 61 people (22.7%) correctly chose $30, which is $70 in sales minus the $40 the jackets cost you.<\/p>\n
The rest were spread thin: No other option passed 9%, showing that once you move past gross and net, most people are simply guessing.<\/p>\n
People think profit means everything left over: The natural instinct is to subtract every cost from sales. That gives you net profit, the money in your pocket at the end of the day, not gross profit.<\/p>\n
The two numbers tell different stories: Gross profit ($30) tells you if your pricing and sourcing are right. Net profit ($23) tells you if your operating costs are under control. You need both.<\/p>\n
If your gross profit is healthy but your net profit is thin, your problem is operating costs, not pricing. If your gross profit itself is weak, you are buying too expensively or selling too cheaply. Separating the two is how you find exactly where your money is leaking, and it is exactly what ZimLedger does for you automatically.<\/p>\n","protected":false},"excerpt":{"rendered":"
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