Priscila Velicia Travel

Posts Tagged ‘Corporate’

$ 5000000 If you are an airline sales. Its sales team has worked hard and just landed a new change in business model. The bill is $ 400,000 in new business. In exchange for this part of the business, the customer said it is willing to pay only 7% of sales. You can make a profit on this piece of new business or would result in a significant loss? The trend of revenue (ROR) for your agency is only 12.2%. How can we afford to accept only 7% of the taxes? When you say “no” to potential clients going elsewhere no doubt. It can really pay the bill?
In my opinion, it is important to perform an “analysis of individual samples of economy” to make a new account. You can then check whether it can afford the deal. Your breakeven is the point where the total variable costs in the short to the input line. Since the variable costs represent only 15% of total revenue, which could theoretically impose a tax of 8.5% and no losses. This means that you do your best to negotiate a reduction in the rate of 8.5% or the new company if the customer pays a fee of 7%, as in my example of openness.
Air turnover $ 5,000,000
A total of 527 390 charges
The total fixed costs 381 700
81 500 Total variable costs
Total expenditure 463 270
Profit before taxation 64 120
Return on revenue up 12.2%
625 000 Agent Productivity
In many companies the cost of labor is a variable cost. But I maintain that the world of travel agencies, labor costs are fixed. Do you need personal agents and mobile computers, when the phones ring. Of course one can argue that claim taking in $ 2,000,000 in additional work, then you will need additional staff, increasing fixed costs. This effect is called a step. You have a gradual increase in fixed cost line. But for the purposes of my example, suppose that after taking into account $ 400,000, you should not add to fixed costs, so as not to hire new employees, you do not have a computer now no longer have to make your room increase, etc.
However, it is good to know how to maneuver a lot of space. You can see if any additional business analysis that can determine a few things:
• The number of tickets you must sell to black in the figures.
• The profitability of the business.
• The proportion of fixed to variable costs and reduce the impact.
• The impact of increasing the share of income from layoffs.
• The point at which to increase the fixed costs to accommodate new businesses.
I’ve also seen many agencies receive the error in the reduction of fee income, but benefits in exchange smartphone to do. If you consider this information carefully to give you the tools to at least a good decision. Here you can measure the profitability of the additional activities.
There is another benefit that is derived from an analysis of the balance. Once past the point of balance, you can offer special incentives to its sales staff, for landing new accounts, ie the value of the next million dollar business that would pay 3% more than the usual 1% or 1.5% of revenue from taxation. You’ll be surprised at how quickly your sales increase love it! The agency’s work is no different than any other company. Make sure you know to be the fixed and variable costs and make sufficient profit in the business!