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Hi there... It does depend on what you do but... A good business with a medium to high gross profit % should aim to make over 20% of sales as profit. I see it that 0% to 10% profit (as % of sales) is like a C grade at best (obviously not near the 0% mark), 10% to 15% is a B grade, 15% to 20% is like a B+ to A-, 20% to 25% is A grade and 25% + would be like A+. If you operate with a low GP, then it is often better to look at your profit % over GP instead of over sales. And the above #s would be similar re what you want to aim for, albeit probably slightly higher %. Of course there are extremes and some companies can make 30% to 50% + profit, but that does not happen overnight. A "normal" business would want to be aiming along what I note above and of course aim for world-class too and blow them away. The above would be pre tax profit % aims. Enjoy and good luck in getting great profitability %.


Answered 6 years ago

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