Why should the price be at least 4 times more than the costs?

You need a reasonable profit that allows you to build up reserves. If, for instance, you buy several items and you do not sell all, you should still make a profit. Even when you start selling them at a discounted price.

It differs on the type of business but it is a good general rule that the selling price should be preferably 8 times more than the total costs. But certainly not less than 4 times more.

In the potential check in lesson four we have left the general cost out. So, if in that initial check your selling price is only 4 times more than the costs it will be very difficult to earn an income. In our coffee bar example this is the case and that means we have to look into complimentary items to make more profit.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.