Until you know the cost per bag and the yield per bag, this is still a hobby and not a business. Here is how the sums are done.
Every decision in this business rests on three numbers: what one bag costs to make, how many kilos one bag gives, and the price you sell at.
Know those three and you know everything else: profit per bag, break-even, and how many bags you need to earn what you want to earn.
| Step | How to work it out |
|---|---|
| Cost per bag | All materials in one batch, divided by the number of bags made. Include fuel and labour. |
| Yield per bag | Total kilos from every flush, divided by the number of bags — including the bags that spoiled. |
| Profit per bag | (Yield per bag × price per kilo) − cost per bag |
| Break-even | Total one-off costs ÷ profit per bag = how many bags before the equipment pays for itself |
The most common way to deceive yourself: working out yield using only the bags that succeeded.
If you made 100 bags and 15 spoiled, those 85 bags carry the cost of 100. Divide by 100, not by 85. Otherwise the paper will always look better than the pocket.
Every cost, the one-off equipment, the capital needed for 100 and for 500 bags, and the true failure rate.
The whole explanation as a PDF you can print and carry out to the farm — and the full course with it, for one payment.
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Mushy Deli