Analysis of 2005 spending

[Cornish Steve]

I've spent much of today pulling together our expenses for 2005. I found the breakdown to be quite interesting:

Attending trade shows: 37%
Product development: 27%
Equipment (h/w and s/w): 9%
Office expenses and telephone: 8%
Gifts and charitable donations: 8%
Other marketing and sales: 5%
Books and tapes on business: 3%
Finance charges: 2%
Other expenses: 1%

Is this typical? Do these numbers point to any areas of overspending or underspending?

[DuaneJackson]

I guess you'd need to compare these figures to the sources of your cutomers. Does atleast 37% if your business come from clients pciked up at trade shows?

[DuaneJackson]

Oh yes, I forgot to say - if you used KashFlow (http://www.kashflow.co.uk) then this would have taken you 2 minutes, not all day. And you'd have had the outgoings breakdown and the answer to my question on what generates your business as easy to understand pie charts.

Sorry, couldn't resist!

[Rob Holmes]

And then combine them with a profit per customer / source as well (NOT income per customer per source) :)

Rob

[Babylon]

And then combine them with a profit per customer / source as well (NOT income per customer per source) :)

Rob

It is also worth remembering that some customers/products/operations have strategic value. Profitability analysis is a short term measure and an over reliance on it can be counter productive in the long-term. E.g. British car industry - with all the design and manufacturing skills the industry lost out to other nations such as Japan because of the lack of foresight of former leaders of the motor industry in UK.

Kind regards,