How To Calculate Profit Margin In Pharma Franchise Business -
Want to know how to know your profit margin as a pharma franchise businessman? Business works with a motive of earning better profits. The pharmaceuticals industry has a lot to offer to all its members. In this post by Arlak Biotech, we will tell you about how to calculate profit margin in pharma franchise business
. It is very easy once you get hold of the procedure.
The Indian pharmaceuticals domain is blooming like mushrooms to achieve the goal of Pharma Vision 2020. Are you new to the industry? Want to know how to calculate profit margin in pharma franchise business
? Profits earning capacity of a particular business is a very important point to know. Do you not know how to calculate it? Knowing a good estimation and a rough idea about how much you can earn or how much you will be earning is crucial. It plays like a motivation to achieve more and more while you invest a huge amount of time, cost, and money.
Factors Affecting Profit Margin In Pharma Franchise Business
The business industry is influenced by a number of factors. These factors affect the business is slow down, boom to boom. Those who are aware of those factors will make the most of the time. It is suggested to make inquiries and be aware of the market conditions. A good businessman will always be aware of the stock market, current prices going in the industry and their conditions etc. Though the pharma industry is a profitable one, it may still face some ups and downs. The factors affecting your profit margin areas here follows:
- Market conditions of that industry.
- The Economic condition of that place and nation also effects.
- Prevailing prices of the medicines.
- Charges of doctors to every health professional will differ.
- Conditions of a certain locality, area or state which varies from one to another.
Procedure to Calculate Profit Margin In A Pharma Franchise Business
Many people ask how to calculate profit margin in pharma franchise business. Well, it is easy! You can simply follow the following steps to do it at your home. It may take some time to hold the grip but once you did it, it will become easier with experience.
Calculate Total Cost or TC:
The indirect and direct expenses are taken while calculating the profit margin. In short, it is the aggregate of indirect and direct expenses. There include manufacturing cost, material cost, sales cost and much more. These all are the expenses incurred while making every product. You can find total cost by using the following formulae:
TC or Total Cost = Manufacturing expenses + Administration expenses + Selling Expenses + Taxes + Other Cost (Total Fixed Cost + Total Variable Cost)
Find Out The Margin Cost:
Once you knew the total cost, you need to take out the new rate which is important ti find the profit margin. Here is the formula of net rate (or final price or selling price)
Net Price = Total Cost X Percentage of Margin
(% of margin may differ from company to company due to difference of policies, regulations etc. one can obtain it from the parent company.)
Calculate Profit Margin:
Now you can calculate profit margin once you take out the net price. It is also named as Net Margin/ Net Profit Ratio/ Net Profit Margin! The profit can be measured through this easily. here is the formula to calculate net profit margin
Profit Margin = Net Profit / Revenue Or Selling Price
*(Net Profit = Revenue – Cost)
Find Out The Realization Amount
To find the actual amount which you will realize, you will need to add or subtract some items. The factors that we jus discussed will affect your profits. Here are the following steps:
Things to be deducted from the revenue:
- (-) Profit Margin
- (-) Doctors Share under Price to Retailer (PTR)
- (-) Stockiest share or commission.
Items to be added in the revenue:
- (+) Company offer like 10+ 1 or 10+ 2.
- (+) Expenses like shipping expenses or transportation expenses.
- (+) Expenses incurred during the period of realization of products.
High-Profit Earning Pharma Franchise Company - Arlak Biotech
So Friends, if you are interested in start pharma franchise business for earning high-profit then join the hand with Arlak Biotech. We are ISO certified Pharmaceutical Company in India that offer the WHO certified pharmaceutical products & PCD Pharma Franchise. We offer the High profile earning pharma products to our partners. We also come in the list of Top pharma franchise companies in India
. For more details, you call us at our toll-free number 1800-121-6263 or
Be careful about the amount you use while calculating. These give you a rough idea in case insufficient data is given. Arlak Biotech is an ethical Pharma Company which is ISO 9001:2008 certified. We offer genuine PCD and pharma franchise all over India. Contact us for more.