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CHAPTER 8 MASTERING YOUR MONEY

sales team and so on. (You learnt all these marketing strategies
in chapters 5 and 6)

While this sounds obvious, most entrepreneurs don’t set specific
annual revenue targets nor to they measure their incoming
sales constantly. They just keep doing the work with no idea
of where they will end up at the end of the year!

2) Cost of Goods Sold (COGS)
The second component that you must constantly watch is your
COGS. Also referred to as cost of sales (especially for service
companies with no actual goods). This represents all the
expenses directly necessary in producing the goods or services
for sale. So this could include certain salaries, raw materials,
supplier(s) costs, manufacturing costs, wholesale prices of
goods etc…

For example, if it costs your company $40 to manufacture a
garment and you sell 10,000 garments, then your total COGS
would be $400,000. To achieve profit growth every year,
you have to constantly measure your COGS and take action
to either maintain this figure or to decrease it. The important
thing is to be able to keep cutting your COGS, while
maintaining the same product quality.

For example, you could source for cheaper materials (i.e
plastics, aluminum electronic parts), outsource assembly
to developing countries or use technology to improve
operational efficiency.

Keep Watching and Maintaining Your Cost of
Goods Sold

In my businesses, my CEO and managers are also trained to
watch their cost of sales weekly, monthly and quarterly. In a

246 SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES