Gas furnaces need to be commissioned to reach their maximum potential (and lifespan). MeasureQuick 2.0 has been a collaborative effort between Jim Bergmann and Joe Medosch, and it comes with an upgraded user interface that allows for faster operation and easier system data access and storage, and it works with more tool manufacturers’ tools. Jim Bergmann returns to the podcast to talk about furnace commissioning procedures and the development of measureQuick 2.0. If you have an iPhone, subscribe to the podcast HERE, and if you have an Android phone, subscribe HERE. Learn more about Refrigeration Technologies HERE. You wouldn’t come close to your gross margin number using the markup method. If you multiplied by markup (140% or 1.4), you would have gotten $70. You would divide 50 by 0.6, and you would get $83.33. In the case of the $50-scenario, let’s say that our cost of goods sold is 60%, so that seems like a 40% markup. Instead, you need to divide by your COGS expenses. If you want to determine a 10-20% goal, DO NOT USE MARKUP. For example, you can use that money for advertising, buying vans, and buying better tools. Net profit can contribute to business growth if you put it into your business. Typically, 10-20% net profit is a good (if slightly idealistic) goal. Let’s say that your overhead costs total $30. Overhead includes anything that doesn’t directly bring money to your business (rent, utility bills, etc.). COGS is the direct cost of the expenses you paid to sell your service or product. In the same case you have above, you have a 50% cost of goods sold (COGS). However, your gross margin is NOT 100% your gross margin is only 50% you only made a 50% profit on the total sale. For example, you can double the price of a $50-part and sell it for $100. The number one mistake that people make in business is confusing markup and gross margin. In today’s short podcast, Bryan clears up the differences between markup and profit margins in HVAC businesses.
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