Calculating Your Loan, Costs, Revenue, and Profit

Sales Steps Examples
1. Determine the product/service you will sell. I will sell lemonade.
2. Determine what materials you will needed to produce the product or provide the service. I will need lemonade mix, water, cups, a pitcher, a poster board and markers (to make a sign), a table, and a cash box.
3. Determine the cost of the materials. This is will tell you how much money you need to borrow through a loan from a friend, teacher, or family member. For example:
  • 5 containers of lemonade powder mix - $25
  • Water - Free
  • Plastic cups - $10
  • A pitcher - $7
  • A poster board - $1
  • Markers - $4
  • A table - Free (borrow from my parents)
  • A cash box - Free (use an old shoe box)
Cost: $47.00
4. Estimate how many products or services you think you can sell in a month. 
  • I think I can sell 100 cups of lemonade each week.
  • I will sell for 4 weeks.
  • 100 cups x 4 weeks = 400 cups
  • My sales quantity will be 400 cups.
5. Estimate the price you want to charge for each product or service and calculate your revenue.
  • Price: I will charge $0.50 per cup
  • Quantity: I will sell 400 cups.
  • Price x Quantity = Revenue
  • So $0.50 x 400 = $200
  • My revenue will be $200.
6. Determine your revenue, pay back your loan, calculate your profit.
  • Revenue = $200
  • Cost = $47 loan
  • Profit = Revenue Cost
  • So $200 - $47 = $153
  • My profit will be $153.