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animals83

Question On Building A Business Plan

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animals83    0

In a typical business plan,you show cost of production and expected profit, then 5 year goals and so on. My question is, how can I possibly calculate cost of slip casting when it varies by product made. Do I just choose a common item and go by that?

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Mark C.    1,808

Cost of slip will be a small cost of whole production in terms of what the object is-of course size will matter here.You will just have to guess.Buy your slip dry by the ton (50# bags)-your formula and save big time on costs.Thats what I did when I had a side slip business.

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RonSa    189

A good business plan is always updated as new information is obtained.

 

In business there is no such thing as standing still, you are either going backwards or forwards.

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A lot of the advice I've received from other entrepreneurs and courses I've taken say to just use the best information you can, which is bound to be imperfect. As stated above, adjust the plan when you get new information.

It sounds like you're starting with your materials costs and working outwards. Instead, try tackling your monthly/yearly sales goals first, and then work out how much you'd have to sell to meet that, and then calculate how much material you'd need to do that.

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Chilly    331

If, say, you're slip-casting dinnerware, do some costings based on one place setting, or six cups and saucers plus sugar bowl and milk jug.  Or average out to a medium sized casting.

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DirtRoads    145

Wouldn't the cost of slip casting always be a % cost to selling price ratio?

 

 I don't slip cast but the cost of clay is 7% of the selling price in my business.  It never comes in at more than 7%.  If it does, then the price is raised.  Sometimes on certain products, like ornaments and jewelry, it is less than 7% but I still price on the 7% which adds a small amount to my overall profit margin.  I price the items, based on amount of clay used.  Glazing materials and electricity add 10% and 8%.  Labor is 25% of the production cost.   Glazing labor being 10% and making labor being 15%.  You just fix the final selling cost to fit in that frame.   I back into the final selling price using these numbers.  That gives me a comfortable 50% margin to cover selling costs and generate a 20% minimum sales to profit ratio.  MINIMUM.  Note:  that's assuming I don't do any glazing or making.  The amount I do adds to my personal profit.

Edited by DirtRoads

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