Business makes much less profit per sales dollar than most people think
When discussing increased minimum wage, mandatory sick days, higher taxes and other government mandated business costs, what is too seldom mentioned is that the Left assumes the increase will come out of (bloated) profits. But reality dictates that most of the windfall wages are passed though to the customers in the form of higher prices. Yes, that’s obvious to those of us we even a modest understanding of business, but you’d be amazed how few people are aware of this.
Try this experiment. Next time you discuss (evil) business with a Progressive, ask this simple question — How much of a dollar of sales do you think is business after-tax profit? Allow them time to answer — PRESS for an answer.
Few will guess less than 20%. 40% is not uncommon. The reality is that it’s maybe 8% — eight cents of every dollar of sales. 92 cents goes for costs.
It’s usually significantly less in labor intensive small businesses such as fast food and restaurants.Here’s a good summation of average profit margins in various types of restaurants:
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