 This is a deadly mistake. This is basically the arrow through the heart is not knowing your numbers. You'd be super surprised by how very, very little amount of business owners that I talked to actually knows their numbers. This is huge when it comes down to it. If you don't plan for your success, if you don't plan for profits, how do you expect yourself to make any profits? This is a deadly mistake that I made in my early careers. Is that I see an opportunity, I see this food item doing really well. I use cream, I sell really well. You know what? I don't need to know my numbers because this product will sell. I put arbitrary numbers out there in the marketplace just because other people are selling it as seven. I sell it as seven hoping that by the end of the month, I would have a surplus in my bank. But little did I know that this is a really, really deadly mistake because what ends up happening is that in my bank every month, I'm seeing $100, $200, and I'm seeing negatives. I do not know how come I'm not getting profits even though I'm selling my ice cream at $7 now before diving too deep into the mathematics. I'm sharing with you three key numbers that you must understand. So then that way you can actually make a difference in your food business. First number to be aware of is your average order value. What does that mean? That means if you're selling a piece of cookie for three bucks. And average people come in and buy two cookies. That's six dollars. Whereas if you can bundle that up, sell cookies in batches of six and 12. What's going to happen is instead of a six dollar transaction, you end up having an $18 transaction. You end up having a $48 transaction because you're able to bundle it up properly. Now your average order goes up by three and four times just because of the fact that you are pricing it strategically. And now your cost of acquiring your customer, your cost of actually marketing to your customers goes down substantially because more people are paying more dollars to you, paying attention and understanding your average order value is really, really important. Now, for example, if you want to make a thousand dollars a month, you don't need to sell to 150 customers. Everyone just paying you chump change. No, all you have to do sell to 50 people at $20 a bundle. Now you can focus your attention, the experience on the 50 people. That's how you're going to make it. And by the way, guys, this bundling concept does not only work on cookies. It works on any type of bakery, any type of food item that you have. It is just you understanding how to strategize to uplift the average order value. The second number that you must know is the cost of goods sold. Basically, how much is the ingredient that you're putting into each item that you're selling that includes the extra labor that goes into making this? That includes all the ingredients, all the packaging that goes into it. And if you do not know this, then how can you make sure that you set the price so that way you can actually make margins that way. You can actually make profits. So many people out there, people that I consult for, it is because their lack of understanding in the cost of goods solds. What does that mean? That means they're setting the price too low. They end up just setting the price as a number that they thought of that the market would want. Instead, they should be setting the price to account for all the cost that goes in addition to your cost of goods solds. That's how you can run a profitable food business. For example, let's say if you run an ice cream business and you are making and selling these pints of ice cream, you're selling it at eight dollars because you know what, that seems like a very reasonable and attractive price for selling a pint of ice cream, eight bucks. But now, because you didn't calculate your costs actually adds up to four dollars per pint. What does that mean? That means you only have 50 percent four dollars to account for your rent, your marketing and any type of labor that you are putting into creating the ice cream, all the extra work that you're doing, let alone marketing and everything else. That means you're actually losing money per pint that you're selling. That means you did not price your pints accordingly. Typically speaking, we should account for labor costs to be 25 percent cost of goods solds to be 25 percent and rental if you have any to be 25 percent. Now, how much should you price this pint of ice cream? Any of where from 12 dollars to 16 dollars is what you should be pricing this pint of ice cream for. How can you add value? How can you actually have your customers want to buy this 12 to 16 dollar ice cream? Now that comes back down to the storytelling. That comes back down to the packaging. That comes back down to your ability to communicate value to your potential customers. And the last number you should understand is your burn rate. What does that mean? That means how much are you going to be forking out if you have zero business in a month? Let's say if you're running your food business in a restaurant, then yeah, it's going to be a much higher overhead. Usually that's five, six, seven thousand dollars. Whereas if you're running a food business from your own home, then you know what the cost and the burn rate would be substantially lower. You must know every month how much you need to account for it as a fixed cost. You must have enough of this cash flow in your banks, stash the side for the rainy days. So then that way you can actually live to fight another day. Now you should always account for your plan B. What does that mean? That means if you're truly out of cash, where can you get additional cash flow just so then that way you can stay afloat for another month until you can actually make it until you actually have a solid base? Well, here is just some areas that you can find additional funding, whether it's from the government grants, whether it's from your bank line of credits, your friends, your family. You must be able to have these things planned out, thought about. So then that way, when the time comes, when you need it, you can access it. Now, when it comes to numbers, I fall asleep with numbers. It is scary. It's a big, hairy monster for me, even though I've been running my business for more than 10 years, reading a P&L sheet, reading a balance sheet still puts me to sleep. And that's the reason why for me, when I'm running my food business, there are only core numbers that I focus on. These things that truly matter. The rest, I don't care about. I take those numbers out and I share it with you. And if that's you as well, you want to understand what numbers to pay attention to, then definitely check out the free masterclass down below because that's where I share with you all the key ingredients that you need to know in order for you to build a thriving and profitable food business. So if you're interested in seriously building a food business that works, check it out in the link below. Guys, I really hope that you have enjoyed this video. I had a ton of fun sharing everything with you guys. If you enjoy this type of content, what do you do? 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