The PROOF is in the PROFIT

Tue, 13 Jan 2009 13:52:40 GMT

We often get asked "how much should I charge for these blocks?" or "how much can I make with these things?" Good questions, to be sure, but the answer is very subjective. World Block prides itself in not interfering with our customer's business and to that extent we often answer, "charge whatever you want." But that's not very helpful. So....

The graph below shows the gross profit potential from just one World Block Landscape Block Form.

There are a few variables in these calculations. They are:

- How many forms you have

- Your cost of concrete

- Your cost of labor

- Your retail price of the block

Taking these variables into consideration, you should be able to come up with a reasonable estimate of your particular profit potential.

Per Year Calculations	Pouring Days	Pours/Day	Blocks	Sq. Ft.	Cu. Yds.
8 Square Feet of Face	250	2	500	4,000	295

COSTS			Per Year	Per Sq. Ft.	Per Block
Concrete	$68.45	per yard	$20,192.75	$5.05	$40.39
Yard Labor (1hr/day)	$16.25	per hour	$4,062.50	$1.02	$.813
Lift Anchor (2/block)	$5.90	per block	$2,950.00	$0.74	$5.90
Licensee Fee*	$0.00		$0.00	$0.00	$0.00
TOTAL COSTS			$27,205.25	$6.80	$54.41

PROFIT			Per Year	Per Sq. Ft.	Per Block
Suggested retail charge	$12.50	per Sq. Ft.
Income			$50,000	$12.50	$100.00
Total Costs			$27,205.25	$6.80	$54.41
GROSS PROFIT			$22,749.75	$5.70	$45.59
Gross Margin			46%	46%	46%

*It should be noted that we do not charge any licensee fees (per block, per month or otherwise). These fees would come directly off of your bottom line and have a negative impact on your margins. If you are comparison shopping, that is a big number to consider.

These projections do not include the cost of the forms themselves. Typically you would want to amortize the costs of the forms from 3 to 5 years. For example if you spend $2,000 on your forms, divide by 3 or 5 to find the yearly cost: $2,000 / 3 = $666.66 per year. $2,000 / 5 = $400.00. In this example, depending on how may years you want to amortize, the annual cost of the forms would be $400 to $666.66 per year.

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The PROOF is in the PROFIT