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24 • The 100 Greatest Ideas for Building the Business of Your Dreams
away 33% of the profit or even more. Work it out if you don't believe me. Here is a
product with a low gross margin to illustrate the point.
At full price Discounted
Sale 1000 1000
Discounted @ 1 0% 900
Cost of sale 0 800
Selling expenses 800
Profit 50
50 50
150
The selling price may only have gone down by 10%, but the net profit has dropped
by 66%.
I have seen owners of businesses do very well by giving the salespeople incen-
tives to achieve the gross margin - sales price minus the cost of the product or
service sold - rather than the sales figure. That way the motivation is to sell at list
price. This may be a more expensive sales bonus scheme but could easily earn its
costs. If there is no share option to offer the people who are responsible for growing
your business then they are going to be expensive. As usual it's a trade off, but there
is no point in being in business if you do not sell your products and services at a
healthy price - so get it right.
Idea 14- Picking your spot
You will need premises. If you are looking at a retail opportunity and need a shop,
we cover that in Ideas 67 and 68. If you need a yard and warehouse space then those
ideas will help with that case too. If all you need is an office then start from home
and look at Ideas 23-26.
If you do need space consider the following:
