Forum Discussion
Timmo_
Feb 17, 2021Explorer II
Business owners (and I are one), have to look at the services demanded by customers and balance it with the cost of providing said service. In most cases (but not always) the 80/20 rule applies to small business commerce: 20% of your revenue comes from 80% of your customers; conversely 80% of your revenue comes from 20% of your customers.
Assumptions:
Campgrounds have a 10% profit margin ($100 revenue - $90 expenses = $10 profit)
Commercial grade level 2 charging station fully installed costs $13,000
Annual costs to maintain charging station is $300
A campground will need earn $130,000 of revenue to pay for the purchase and installation for their charging station. ($130k X 10% profit = $13,000).
Each year the campground will need $3,000 of additional revenue to pay for annual operation costs ($3k X 10% profit = $300).
So, is the campground facility better served if owners allocate $13k of profits to patronize 1% of their customers (percentage of EV vehicles on the road) or should the campground owners allocate $13k of profits to service 99% of their customers that provide most of the revenue?
And remember, campgrounds were not deemed "essential business" and were slammed by COVID-19 closures last year, unlike the retail stores that remained open and have lots of dough.
Assumptions:
Campgrounds have a 10% profit margin ($100 revenue - $90 expenses = $10 profit)
Commercial grade level 2 charging station fully installed costs $13,000
Annual costs to maintain charging station is $300
A campground will need earn $130,000 of revenue to pay for the purchase and installation for their charging station. ($130k X 10% profit = $13,000).
Each year the campground will need $3,000 of additional revenue to pay for annual operation costs ($3k X 10% profit = $300).
So, is the campground facility better served if owners allocate $13k of profits to patronize 1% of their customers (percentage of EV vehicles on the road) or should the campground owners allocate $13k of profits to service 99% of their customers that provide most of the revenue?
And remember, campgrounds were not deemed "essential business" and were slammed by COVID-19 closures last year, unlike the retail stores that remained open and have lots of dough.
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