René Yard, our new partner and team member, covers Gross Margin. Trevor Morones dives into food safety to show the connection between the two. Revenue minus your COGS (cost of goods sold) equals your Gross Margin or “Market Basket”. Our usable product provides us with two platforms, Social and Financial responsibility. Bottom line, we are in business to make money but we must be aware of our impact in the market and society.
When choosing raw material suppliers we have a primary and secondary vendors. Do these vendors have the same or similar vision for social responsibility? Do these vendors meet the requirements of our approved supplier program? How can we work together to create safe food for our customers? This is where our prerequisite programs or “PRPs” start to connect with the business. Prerequisite programs are the foundation to our Food Safety Management System and our HACCP plan.
If there is not a sufficient market basket the business may not have the proper finances to provide ourselves with an income, support our preventative maintenance program, Sanitation program, our the resources needed to adequately train our staff. All of these, are PRPs that are apart of the foundation of our Food Safety Management System. A stronger Food Safety Management System allows for new business opportunities which creates a stronger gross margin (market basket).