Distribution Channel Margin Calculator for a Startup

A business needs to understand its distribution channel and in particular how the total margin made on its products are allocated between the various partners. Understanding the channels allows a business to for example calculate a required manufacturing cost from a retail price or a wholesale price from a given cost.

This free Excel channel margin calculator can be used to calculate the margin at each step with the distribution process.

Last modified May 13th, 2019 by Michael Brown
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Production Capacity Calculator for a Business Plan

This free production capacity template can be used to estimate the machinery, production facilities and labor resources required by a manufacturing business to enable it to make sufficient product to satisfy its forecast sales demand and inventory levels.

Last modified June 18th, 2019 by Michael Brown
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Cost of Revenue

The term cost of revenue is used by a business to refer to the total costs necessary to generate a sale. It is similar in nature to the cost of goods sold except that cost of goods sold only includes costs prior to the sale, whereas cost of revenue also includes some additional costs necessary to complete the sale transaction.

Last modified January 29th, 2019 by Michael Brown
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Inventory Purchases Budget

The inventory purchases budget shows a business how much inventory it needs to purchase each period to maintain the required inventory levels and ensure the availability of products in appropriate quantities and costs to meet anticipated demand.

Last modified February 8th, 2019 by Michael Brown
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Cost Classification in Financial Projections

There are two major cost items to take into account when preparing financial projections, manufacturing costs, and non manufacturing costs.

Manufacturing costs are the costs incurred in the manufacture of a product for sale to customers and are included under cost of goods sold and inventory in the financial projections. Non manufacturing costs are costs not related to the product and are included in operating expenses in the income statement of the financial projections.

Last modified January 29th, 2019 by Michael Brown
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Expense Forecasting

To simplify the process of expense forecasting there are various techniques which can be employed to link each type of expense to other variables (cost drivers), such as revenue or headcount, which have already been forecast in the financial projections. Of course there will always be expenses which are fixed in nature, which cannot be linked to other variables and need to be estimated in absolute monetary terms.

Last modified January 29th, 2019 by Michael Brown
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Markup on Cost

Markup on cost and gross margin ratio are useful for monitoring trends and making comparisons with other businesses. In addition, depending on whether your starting point is cost price or selling price, they can be used as a management tool to control buying and pricing decisions within the business.

Last modified February 8th, 2019 by Michael Brown
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