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And with just a little more data you can actually determine how many customers you would need for each year you plan for and how many leads you would need. From that you can actually determine what size market you would need and whether your market is big enough to supply those leads that could be converted into customers.

Labor and material costs are also directly proportionate to sales. These are things that go directly into the making of the product or into doing the service. a. Labor cost is the actual direct labor used in the making of product or doing the service. The cost would also include all the fringe benefits like social security, payroll taxes, vacation pay, holidays, sick pay days, etc. b. Material costs are all the materials used in the making of product or in doing the service. In the lawn mower service as an example it would be the gasoline used in the mower and any other materials used directly in that service. For producing a product it would be all the materials used in the product that is sent to the customer including all the packaging materials.

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