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Every penny counts, and that is a fact. A penny per customer, per day, adds up to $182.50 loss per year; assuming 50 customers per day. If your company is lucky enough to earn 10% profit per year, that means you have to sell $1,825* worth of products to get back your one penny!
*Calculate the ‘real’ cost of an expense as a function of profit; this will help you see the bigger picture. If you really want to get profound and depressed, calculate the opportunity cost of that $182.50. If you buy and sell that six times over the course of a year, assuming a keystone markup, that is $11,680! Every Penny Counts!
**Annualize: calculating expenses on an annual basis. Annualizing expenses for management and perspective purposes helps everyone in the organization see the value of not wasting, cost management, and being efficient. A dollar an hour for a full-time employee is $2,000 per year, or $20,000 worth of sales if you make 10% profit!
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