Dragons den

[Barbarossa]

what does the company do again?

Prints money I think...

[Robert00000]

@ Bararossa. The business i mentioned there was the one i abandond. We have changed our focus from restaurants and fast food outlets into a more profitable area, but are using the same facilites we created for that business.

This is really funny.

£720k profit from a £900k turnover in a first year of trading. That doesn't happen, unless the accountant is an idiot. Imagine the tax bill

What's probably happened is that Rob the letch has added a zero onto his figures and is, in fact, talking about gross profit rather than net because he doesn't really understand the difference between the two. That would make a bit of sense and be realistic - particularly when he thinks oursourcing is a reasonable explanation for an 80% profit margin.

This is why i think manker is a retard. He is suggesting he understands my business more than myself.

I have never said it was gross profit. When calculating profit for investors or anyone else interested in how well the business is doing its better to mention gross profit, as this gives a better idea of the business's performance. But of course to minimise tax you find ways to re-invest the money.

I don't know why he thinks he understands outsourcing better than myself. Our outsourcing is the reason for our high margins because rather than employ high cost UK staff we have chosen to outsource the work abroad for about a tenth of the cost. In addition we have deployed efficiency measures which saves our clients further.

Added to this is that Robert was working from his bedroom until late October last year. When he informed us that he had, at last, got an office and would be setting up his new business from there. As I recall it was some time before he could afford a broadband interweb connection.

I was not working from my bedroom , and the reason why it took so long to get broadband at work was a problem with BT. But I was far more concerned that they were having problems installing the phone line.

In the end they paid me some (meager) compensation.

[GepperRankins]

how much net profit have you earned this year and what do you reckon to next year?

[DanB]

knobber peado letch fake businessman

[manker]

Robert, you haven't the slightest clue.

I wonder if you could explain why you think gross profit gives a better idea of the business' performance. The reason I ask is because no-one in the whole wide world who can understand a P&L would agree with you.

Also, I do understand outsourcing better than you. In fact I'd go as far as to say that it falls within my area of expertise. FYI, outsourcing isn't a synonym for farming out work to a foreign country. It's merely an example - which is why your blanket statement earlier that 'I outsource so my margins are high' was pish.

If you have to get foreigners to develop software for you, then you're paying them money which you wouldn't have to pay if you could code it yourself. Therefore outsourcing has cut your profit margin. Sure, you can say that otherwise you'd have to get UK coders to do - but that's still outsourcing.

It just means that this particular type of oursourcing has cut your profit margins by less than another type of outsourcing.

Further, if the idea that Barbarosa posted was subsequently rejected by you in favour of a different venture - how then have you got a full year of accounts. You posted it on the 21st August 2004.

You won't know this but once a million pound company gets to its year end, it will take at least a month to produce a set of accounts with which one can derive a profit figure.

You're full of shit. I'm surprised, really.

[JPaul]

I have dabbled a wee bit with the old reading a set of accounts me'self. I am by no means an expert however I do not consider it a black or arcane art.

Reading Robert's contentions it would appear to me that he is someone with a minimal grasp on how businesses, accounts etc work. He then uses this to try to impress the Ladies on the interweb.

I particularly liked "I have never said it was gross profit. When calculating profit for investors or anyone else interested in how well the business is doing its better to mention gross profit, as this gives a better idea of the business's performance. But of course to minimise tax you find ways to re-invest the money."

Now forgive me for being simplistic here, however Gross profit is really just sales minus cost of sales. That is before taking off other expenses like rents, rates, salaries, loan repayments, taxes, depreciation of assets other expenses.

Net profit is the figure after having deducted these other expenses. To put it simply, how much the business makes.

Now I would have thought this would have been of some interest to potential investors. There could be a large gross profit and net loss, if for example the business had over borrowed (see manutd).

The "But of course to minimise tax you find ways to re-invest the money", is particularly nice, as it doean't mean feck all. It could only be improved by adding "and stuff" at the end.

[clocker]

I would like to note that JP just outsourced part of his post.

"And stuff" was coded by me.

[JPaul]

I would like to note that JP just outsourced part of his post.

"And stuff" was coded by me.

Hoi, you sold me the interlectural rights to that.

It were the best part too, sucker.

[brotherdoobie]

Robbie... you are a nob. Your lies just bore me now.
That is all.

P.S. Goodbye.

Peace bd

[Robert00000]

OK I confess i dont own a business, i actually live on mars and do daily battle with emperor zog for control of his jelly lake

As always any discussion with manker and his clone always go round and round in circles, and this thread will go the same way.

It simply isnt worth my time to explain every aspect of my business to people here, i honestly have better things to do.

But i will clarify a few things, the core of the argument is with manker regarding outsourcing. I want to reiterate "He does not understand how my business works".

What we develop are systems (not going to say what) for each client. This work cannot be done by myself because as it would be too time consuming, so we need to employ other people. For each client it takes between a few days to weeks to create this system.

If we employed UK staff it would cost far more than employing the services of outsourcing companies abroad.

So to reiterate, "outsourcing is the reason for our high margins" because our costs are much lower than if we employed UK staff. If we employed UK based staff our profits would be negligible.

As for the gross profit, net profit etc. here are the definitions:-
net profit
Gross sales minus taxes, interest, depreciation, and other expenses. also called net earnings or net income or bottom line.

gross profit
Pre-tax net sales minus cost of sales. also called gross income.

In between "gross Profit" and the "net profit" we have the accountant who would suggest we make capital investments so the profit appears much lower than it actually is when submitting the accounts. But these capital investments are "one off" expenditures that add to the assets. The capital investments we have made "appreciate" in value over the long term i.e. property for the business.

As for the other expenses i.e. salaries, again you need to understand how my business works. As we OUTSOURCE the work abroad and we pay agents commission to obtain clients, these are included under "cost of sales". So in effect our "gross profit" has most of the costs stripped out. Our "net profit" essentially is what we have left over after my salary, the running cost of the office, any captal investments we have made and ,of course, the taxes.

Manker and others should not be giving advice without understanding how a particular business operates, but advice or serious opinions are not their intention, it is rather to be a nuisance.

This thread has been taking too much of my time, anyone serious about understanding the world of business from someone with actual experience of owning and running a business feel free to ask me a relevant question, just as long as it is brief. But those wanting to be an annoyance should find other threads.