vol 1 - 3 March 2009 a monthly newsletter from real company limited
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Dear ,
It is all over... the wining, jamming, endless fetes and festivities, all that was Trinidad and Tobago Carnival 2009.
So what are we left with? A cheerful reminder of the good times shared with old friends, finding new ones and the freedom, joy and excitement that permeated our spirits. Of course not forgetting the startling reality of emptier wallets. But hey... to experience a "Trini Carnival" is - PRICELESS.
Speaking about price, all we hear about these days are cut backs, layoffs, the ever popular tightened belts and a string of other jargons that give fear ample room to flourish. However, we must continue to live and businesses must continue to thrive. This month's RealNews newsletter seeks to shed some light on better money management personally and in our businesses. Keep reading I am sure it's going to be worth your while.
Thanks for taking the time to read RealNews this month and you can sign-up your friends for a FREE copy. Also we look forward to working with you on your next video, print or audio advertising project, so do give us a call or refer us, should the need arise.
Best regards,
Stephen Doobal
Real Company Limited
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Lets Put Over $8,000 In Your Pocket
We are living in tough economic times, of course that is no news to you when you don't even have enough to last you through the week. Why does it seem that the money we make is just not enough? What is really contributing to our empty wallet syndrome?
If we told you we had the answer to put over eight thousand dollars back in your wallet with just a few simple cutbacks, you'll probably think we're crazy right? By cutting back on 4 doubles, 1 movie ticket, 2 packs of cigarettes and $100.00 liming expenses per week you can save $8,736.00 per year. "Madness" you say? Well, lets break it down for you.
The average Trini will spend about $16.00 per week on 4 doubles. Multiply 16 by 52 weeks....that gives a total of $832.00
An outing to the cinema will probably set you back about $22.00 and that is just for the ticket! 22 by 52 will be $1,144.00 per year.
If you are a smoker then an average 2 packs per week calculated at $30.00 by 52 weeks will give you a total of $1,560.00 per year!
Limers you are not exempt from these cutbacks either. Even if you spend a mere $100.00 per week on recreation you would still incur an annual expense of $5,200.00
Add them all up and you get a whopping $8,736.00 yes people, EIGHT THOUSAND SEVEN HUNDRED AND THIRTY SIX DOLLARS you could have pocketed. So the time has come to figure out what is really a necessity and what are those elements we can live without. So the next time you reach for your wallet to make a frivolous purchase, I want you to ask yourself, "Do I really, really...REALLY need this?" If the answer is no then....KACHING! - Look!!! your wallet is getting FATTER!
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Sex; Lies; and Money, King Carnival and the Gaup-Hoes, Divas and premiering this week, My Fair Hooker - Are our theatre producers trying to tell us something?
Well for many who attended these shows, we are sure you left with a belly full of laughter and heart full of joy. While the names might be sensational the entertainment was first class. The Trinidad theatre patrons respond best to comedies and the producers have been challenged to find stories that not only provide good laughter, but twists and turns that will keep audiences surprised, entertained and coming back for more.
One of the producers who has consistently push the envelope in local theatre productions is Richard Ragoobarsingh. He recently teamed up with Real Company Limited to experiment with adding video openings to his productions, a new approach that has given additional entertainment value to patrons and productions.
The next theatre production comes from producer Gregory Singh who has cast theatre heavy weights, Raymond Choo Kong and Penelope Spencer to present "My Fair Hooker" at Queen's Hall, from 5th to 8th March, which is sure to be another must see of the season. Don't miss it.
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Calculating Your Advertising Budget
By Roy H. Williams
Q:I've never really done much advertising for my business; I've always relied on networking and word-of-mouth. Now I'd like to launch a small campaign, but I'm frightened it will cost a lot of money. How can I figure out where to start?
A:The first thing you must do is calculate your minimum and maximum allowable ad budgets:
Step 1: Take 10 percent and 12 percent of your projected annual, gross sales and multiply each by the markup made on your average transaction. In this first step, it's important to remember that we're talking about gross markup here, not margin. Markup is gross profit above cost, expressed as a percentage of cost. Margin is gross profit expressed as a percentage of the selling price. Sell an item for $150 when it only costs you $100, and your markup is 50 percent. Your margin, however, is only 33.3 percent. This is because the same $50 gross profit represents 50 percent of your cost (markup,) but only 33.3 percent of the selling price (margin.) Most retail stores in America (carpet, jewelry and so on) operate on an average markup of approximately 100 percent, some operate on as little as 50 percent markup and others add as much as 200. More expensive items, such as cars, recreational vehicles and houses, typically carry a markup of only 10 to 15 percent.
Step 2: Deduct your annual cost of occupancy (rent) from the adjusted 10 percent of sales number and the adjusted 12 percent number.
Step 3: The remaining balances represent your minimum and maximum allowable ad budgets for the year. At this point in the calculation, you may learn that you've already spent your ad budget on expensive rent, or you might also learn that you should be doing a lot more advertising than you had previously suspected.
Now let's calculate an ad budget. Assume that my business is projected to do $1 million in sales this year, I have a profit margin of 48 percent, and my rent is $36,000 per year. The first thing to do is calculate 10 percent of sales and 12 percent of sales ($100,000 and $120,000, respectively).
Second, we must convert my 48 percent profit margin into markup, because markup is what we've got to have to make this formula work. Most business owners know their margin by heart, but never their markup. To make the conversion from margin to markup, simply divide gross profits by cost. Dividing $480,000 (gross profits) by $520,000 (hard cost) shows us that a 48 percent margin represents a markup of 92.3 percent. Bingo.
Now we multiply $100,000 times 92.3 percent to see that our adjusted low budget for total cost of exposure is $92,300. Likewise, we multiply $120,000 times 92.3 percent to get an adjusted high budget for total cost of exposure of $110,760. From each of these two budgets, we must now deduct our $36,000 rent. This leaves us with a correctly calculated ad budget that ranges from $56,300 on the low side to a maximum of $74,760 on the high side.
Most advertising salespeople will tell you that "5 to 7 percent of gross sales" is the correct amount to budget for advertising, but don't you believe it. It simply isn't possible to designate a percentage of gross sales for advertising without taking into consideration the markup on your average sale and your rent. Yes, expensive rent for a high-visibility location is often the best advertising your money can buy, since a business with a good sign in a high-visibility location will need to advertise significantly less than a similar business in an affordable location. To prove this, just look at the example above and change the rent to $75,000 per year. In this case, the ad budget would range from $17,300 to $35,760, representing just 1.7 to 3.5 percent of sales. The formula I've given you is the only one that reconciles your ad budget with your rent as well as the profitability of your average sale. Good luck!
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 Contact Information
real company limited
VIDEO, PRINT AND AUDIO ADVERTISING PRODUCTION
1, Savannah Gardens, Orange Grove Road, Tacarigua. Trinidad and Tobago.
phone:1-868-640-1774 fax: 1-868-640-0331
email: production@realcompanylimited.com
Visit our website... www.realcompanylimited.com
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