Help! How do I work out my costings please?

(3 Posts)
Doughnut123 Wed 07-May-14 21:26:22

Hi all, I am in need of help please from anyone who has their own small business. I am just starting up a small business making preserves and cakes. My problem is that I am hopeless at maths. I can do the basic cost of my ingredients and then add my time on, but I've heard that you need to divide the cost into 1/3 each for ingredients, labour and profit.
I am befuddled. Please can anyone advise me ? Thank you.

Lonecatwithkitten Wed 07-May-14 22:08:23

There is a rule of thumb that total sale price is one third raw materials, one third time, one third profit roughly.
So if your raw ingredients cost £3, your time to turn it into new product is £3, sale price would be £9 giving a profit of £3. However, some of this depends on your skill set. In my business professional skill makes up 60% of sale price as it is a highly trained skill set.

Doughnut123 Thu 08-May-14 07:52:33

Thanks alone at. I'll try that.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now