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Differentiate Direct Costs from Overhead

14:32
17:42
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At 14:32 in

Keynote Speech- Your mouth makes you Your Money #3 4 k video

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What happens here

Phil clarifies the distinction between 'Cost of Goods Sold' (direct costs) and 'Overhead Expenses' (indirect costs). Direct costs are expenses directly tied to a specific project, such as materials and labor. Indirect costs are ongoing expenses regardless of whether a project is undertaken (e.g., insurance, rent, advertising, computer expenses, attorney fees). The formula for net profit is: Total Revenue - Cost of Goods Sold - Overhead Expenses = Net Profit. Ideally, overhead should be around 25% of your business's revenue. If it's higher, look for ways to lower it. If it's lower, consider investing more in marketing or improving your operations.

Goal: Accurately categorize project-related expenses for better financial tracking.

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pushing higher numbers I'm going to encourage you strongly to look at ways to go over if you're pushing lower numbers you could say oh that's great I'm rocking some lower numbers I would encourage you to raise those dongers let's race that over it people don't want you to spend more marketing none of their ideal clientele you gonna be spending enough on advertising to the right people so that is the formula or over it you're going to look at your total revenue subtract out your cost of goods sold subtract out your overhead expenses and you'll be left with a net profit No so there are just two places in which is in your constitutes yes so that's one way to do it but this is something you guys this is a business killer I don't I don't want to leave this floor without you guys getting a grasp on how to calculate your overhead or at least a determination that you will go on calculate your over edge because it is one of the biggest factors to your yearly success we all in agreement on that one you guys all right we're there what what's up here yeah there's this

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