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Most cannabis entrepreneurs spend every day sweating about overhead. Which makes it hard to throw more money into the business to scale it.
How much is too much overhead?
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That’s a trick question. Put your focus on overhead as a ratio, as a percent of revenue, not an absolute, desirable dollar amount.
If you spend money to make money, that’s a win.
Yes, it’s a trite lesson, but it’s easy to lose track of when you are sweating every bill.
Here’s a simple example of why overhead ratio is a better key performance indicator than total overhead:
If you make 100 edibles canisters a month for $1,000 (overhead) and sell them at $20 each for $2,000 (revenue), your overhead is 50% of revenue.
The math is
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