Getting to breakeven without more revenue…

In an earlier post DABOSS asked about getting to Breakeven with the current Profit Margin of 25%.

Well think about this for a second

The current profit margin is based on a 90%/10% split between Products/Services

Products give us a 19% profit margin yet services yield a 77% profit margin ydt the blend resulting in 25% margin because of the overweight in Products.

In FY 07 we had no service revenue, but now that we have started dealing directly with the Airlines our service revenue ytd is over $500K.

As we continue to add direct sales to Airlines our Service Revenue will increase.

Once we get to about a 50%/50% split between Hardware and Service revenue our current ytd Revenue of $5 Million would give us more like a blended 48% profit margin and ytd breakeven. 

That’s right building the Service revenue, which is what EDIG is working on, will lower the breakeven point for total revenue assuming the margins can hold up.

My 2 cents

Ron