What does a 9 year old know about Profit Margins?

What does a 9 year old know about Profit Margins?

We had our four grandchildren for the weekend and were going out for dinner.  Naturally, my teenage granddaughter and I wanted to go to a restaurant for hamburgers, the boys wanted pizza and the 6 year old wanted dessert.  My husband, ever practical, convinced us all to go to the food court at  Costco but to make it fun, we called it “Chez Costco” the grandest restaurant in town.

We got a  huge 18″ pizza for $9.95some hot dogs and other things so that dinner for 6 was less than $30. My grandson was chowing down and having a grand ole time when suddenly he chimes in and declares “Costco must be the lowest margin business out there “.  “What”, I ask, “do you mean by margin?” Where upon he proceeds to tell me about margin being the difference in what something costs and how much you sell it for and that the pizza food cost was probably $9.25 and the soft drinks were probably only a 5% margin etc.  He actually calculated the cost and margin of every item we purchased and determined how much they made on us for the evening.  He was probably spot on.  I have never known him to be off by much.

We had a good time, saved a little money and when I am ready to open a new business, I know who I want to be by my side….

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