**How Much Money and ROI?**

This simple worksheet will answer this question for you. Details and explanations for the questions and formulas are on the pages following this worksheet. Ask the Cart-Away Research Department for a complete analysis of your community. Many of these calculations will be included.

__How much will materials cost?__

**Cement per 94 lb bag: $________ x 5 (average sacks per yard) = $________(A) **

**Price per ton of con-mix: $________ x 1.35 (tons per cubic yard) = $________(C)**

** Price per cubic yard of con-mix = $ ________(B)**

(For price per yard vs. price per ton see “Explanations” page)

**Average hourly wage per hour: $_______ divided by 4 = $________(D)**

** Total material cost of one yard of 5-sack concrete = $________COST**

__What can I expect to charge for a yard of concrete?__

**Local transit-mix company price per yard of 5-sack mix concrete without the “short-load” fee: $_________ (E)**

**Local transit-mix company price per yard of 5-sack mix concrete with the “short-load” fee: $________(F)**

**If purchased by the pre-mixed bag of concrete, one yard would cost:**

**80lb bag @ $________ per bag x 44 bags = $________ per yard (G)**

**60lb bag @ $________ per bag x 60 bags = $________ per yard (H)**

**Trailered Ready-mix competitor price per yard of 5-sack mix concrete: $______(I)**

** My retail price per yard of 5-sack concrete will be: $_________RETAIL**

__What’s my Gross Profit?__

** My retail price per yard of 5-sack concrete: $__________(J)**

** Total material cost of one yard of 5-sack concrete: $__________(K)**

** My gross profit per yard of concrete: $_________ PROFIT**

** $________profit divided by $______retail = _______% Profit per yard. (L)**

**(Actual profit margins will be higher due to “portions of a yard” that are up to 30% of total sales)**

__Potential Trailered Ready-mix Profits.__

**Assume 700 yards a year X $_______retail X ____% profit = $_____________(M)**

**Assume 1200 yards a year X $______retail X ____% profit = $_____________(M)**

**Assume 2000 yards a year X $_______retail X ____% profit = $____________(M)**

__Explanations for Worksheet__

Only __you__ truly know your marketplace. The “** Can I Make Money?”** worksheet acts as a “double-check” to any information that we provide from market analysis. We ask that you fill it out and see for yourself what you can accomplish in your market.

__How much will materials cost?__ ** **

Call your local suppliers of bagged cement and ask what they charge per sack, but don’t ask for a discount. You’ll receive one later as your buying quantity increases, this keeps things conservative for your Start-Up planning by figuring high and enter the amount on line (A). Eventually you may have the volumes that would warrant a cement silo, which will allow you to by your cement in bulk, saving between 5 and 8 dollars per yard of concrete.

Next call your local suppliers of pre-mixed sand and gravel. This is called con-mix or concrete-mix. This is sold in two ways: by the cubic yard or by the ton. Be sure to get a __delivered__ price. If your supplier sells by the cubic yard, enter that dollar amount on line (B). If it is sold by the ton (more common), use the formula provided on line (C).

Labor cost represents dollars spent for employee time that would be taken from other yard duties. It’s also as constant as raw materials. With a Start-Up system figure your labor expense as one quarter of the hourly wage paid because it will take about 15 min to complete a trailer hook-up and one-yard mixture. Enter this figure on line (D).

__What can I expect to charge for a yard of concrete?__

The first thing to do is check to see what the local transit-mix company will charge for a single yard of concrete. Generally, there will be a “short load” fee attached to the price as most ready mix companies favor the larger contractors and shy away from smaller loads. But, get the price with the “short-load” fee as well since we’ll look at that number later. Enter this information on lines (E) and (F). If you want to use regional averages for short-load fees, ask Scotty Crist for the most recent national short-load fee survey at **800-909-9809**

If a customer went to a local handyman-store for pre-mix bags of concrete, what would they pay to mix a yard of concrete by hand? This is helpful and useful information when explaining why customers should buy from you instead of breaking their backs to mix concrete by the bag. Also, point out that bagged pre-mix concrete is generally post-hole mix or a 4-sack mix, which is not very strong and prone to cracking in flat-work. Enter the pricing and calculations on lines (G) and (H).

Do you have any competition? This is not necessarily a bad thing. Competitors cannot expect to control the entire market. If you have another U-cart location in your area log in their price for 5-sack concrete on line (I).

Our studies suggest that your price per yard should be 20-40% higher than the local transit-mix company’s price per yard. An easy way to look at this will be that you want your price above what they charge per yard, but below what they charge per yard with the additional “short-load” fee.

Next, you must consider your competitor’s pricing. Certainly, you have competitors in your market for other goods you provide. Use the common sense that sets the prices of these goods to set the price of your concrete, but remember this:** You will be providing concrete in trailers that will keep the concrete ready-to-use after traveling to the job site! This is worth a few extra dollars per yard and the customer will realize this after using the Rotating Drum Trailer only once! **(Many operators charge an extra $20 per yard or more for the convenience of a rotating drum.)** **

With the information from these surveys, you can now establish a projected retail price for a yard of five-sack concrete. Most operators get nearly double the cost of materials, so you can also use your costs to check your projected retail pricing.** **Enter your retail price for a yard of 5-sack concrete on line (J).

__What’s my Gross Profit?__

It seems easy to figure this, but keep in mind that not only will you sell __full__ yards but you will also sell __portions__ of one yard. Pricing of the quarter yard increments is more than just that portion of the full yard price. Because of this fact, our profits will increase as you sell portions of a yard. Ask your Cart-Away representative to help you establish the retail sales price for 3/4, 1/2 and 1/4-yard portions. But, for the sake of this worksheet use the formula provided for a conservative estimate. Transfer your total material costs to line (K) and subtract it from the retail price per yard on line J, which calculates your profit per yard. Take your profit per yard and divided it by you retail price to find the percentage of profit you will gain on each yard. (see line L.)

__How much Profit can I make?__

The amount of money you can make is dictated by the total yards of concrete that you sell. These sales totals very based on population in your area along with the type of trailers you use to service that market. With the effective range of the Rotating Drum Trailer at approximately 20 miles, you can expect to draw business from a wide area. The average TBRM operation will sell around 1200 yards of concrete every year. Use the following three annual sales assumptions to give you an idea of what profits you could expect from your concrete business. Calculate your yearly profits if your sales are 700, 1200 or 2000 yards per year on line (L’s).

Next you can determine how long it will take for you to return your initial investment from the profit numbers that you project.