Turnover & Production Costs

This post is a complement to the analysis undertaken for Artquest in the March – May 2010 newsletters. For more details on our partnership with Artquest click here.

One of the things we’ve noticed as we analyse the 2008-9 data is that there is a dramatic difference between the profitability of the product based creative businesses that use MyCake vs. the service based ones. Whilst the average profitability across the whole user group is about 28% of income this disguises the real picture

  • product based businesses who spend more than 35% of their turnover on materials end up with about 2.5% profit
  • service based businesses who spend under 10% of their turnover on production costs end up with closer to 40% profit

The graph below shows that the businesses with the lowest turnover (the brown columns) are the main culprits when it comes to spending too high a percentage on production materials. That is to say that those who can least afford it are tying up resources they can’t spare!

Remember – in this graph a low figure (ie short column) is good!

If you’re a MyCake user you can benchmark your own data (rather than just look at these general results) from in the results section of the benchmark. See this post for a how to guide to reading your results.

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