Studio owners, are you thinking about adding a new medium? Maybe you don’t do clay, or maybe you want to add the last few mosaics to your mix of products. All right, I want to make sure that you have good guidelines because we can look at a lot of shiny objects and they look fun and cool.
But, what we really want to analyze before you add those mediums is what’s their return on investment going to be, and how quickly will they help me get there? If you’re going to just have to buy equipment and materials to keep in your inventory that is not going to turn, or you don’t have a significant plan in place to make those things work immediately upon purchase. Don’t do it, all right.
I suggest that you look at the mediums that you offer right now. Determine how much each of those mediums makes for you. If they don’t contribute 20% to your gross profit line, you should probably get rid of them. You want to narrow your focus, especially these days you can spend a lot of money on inventory and supplies and the space to house those and do those projects. Although they might be fun, they may not be good business opportunities.
So make sure you’re analyzing that, again, if you want to add new mediums, have a plan in place of how they’re going to get to that 20% within six months. That should be a contributing factor to your decision of whether or not to add that new medium to your mix. I’m Donna Bordeaux with PYOPAccounting.com. Please follow us on our YouTube page and Facebook page. We’ll keep you up to date with our latest news there. Thank you. Have a great day.
Donna Bordeaux, CPA with PYOPAccounting.com
Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux. They have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.
