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Everything you named should be included in the price you charge for a cup of coffee. So the money you extract from it, minus the cost you named is your profit.

Everything you named should be included in the price you charge for a cup of coffee. So the money you extract from it, minus the cost you named is your profit. If you dont make profit on that sale, I have bad news for your business idea. >Yep, you could do this. Only problem is, uh, you never make any money. If you're running a hobby or something, that's fine, but most people owning business want to realize some profit... Debt is technically profit in that sense, as long as you can pay it back.

Leif24 2mo ago
Ok, fair enough. To focus on one line item I mentioned ("What about the fractional cost of the machine that actually puts the water and beans together to brew the coffee (you could do some sort of analysis based on purchase price / total number of coffees made over useful lifetime)") - my understanding is a capital expense like this is typically handled by amortizing it from revenue over the course of a few years (super easy, just cost of machine / useful lifespan). Just need to rework the formula to solve for fractional cost per coffee brewed instead of per year. The same process can be used for, say, the "royalty and license fees" Starbucks UK was paying. Just convert from fee per year to fee per coffee. So, the net effect of your big change is just reworking all the accounting from "per year" figures to "per coffee" figures? How does that improve anything about the world (other than giving accountants some more work that they will charge handsomely to do)?
bluecalm 2mo ago
>>Everything you named should be included in the price you charge for a cup of coffee. So the money you extract from it, minus the cost you named is your profit. When you first invest 100k and then sell something for 2$ you don't make a profit for a while. You may be arguing for some other tax but it's ridiculous to argue income tax should be paid until revenue > costs. >>If you dont make profit on that sale, I have bad news for your business idea. When doing business you often don't know if you will make profit or not. In the coffee example you don't know how many you are going to sell so it's impossible to "include costs in the cup of coffee" because that depends on how many you are going to sell and that's unknown. Your whole line of reasoning makes 0 sense.
- sevenzero 2mo ago
  My whole line of reasoning makes perfect sense given I worked in trades doing exactly what I talk about in a country with one of the most complicated tax systems there is. Prices are calculated by adding your costs into the base price which is common sense. If you do that you can actually calculate the amount of coffees you need to sell to turn a profit and if the business even makes sense in the first place. Every unit of coffee you sell should turn a profit. Which in turn should be taxed. Even cigarettes that probably only turn micro cents profit should be taxed by per unit sold. They even are, given their sales are heavily regulated. No company is giving out "free" products without making a profit just to go even on their initial investment.
  - jacobjjacob 2mo ago
    Over what timescale do you amortize your investment by pricing it in? Do you earn back your $100k by selling $20 coffee? That wouldn’t be sustainable. So, this is where the loss comes in. You can’t realistically sell at a profit considering your capital investment if you aren’t carrying it over longer periods of time.
  - bluecalm 2mo ago
    I am sorry but this is just nonsense and luckily I don't know any country where you are required to do that. I started a business myself, first I spent a lot of time making something and then I tried to sell it. I had no idea if people would buy it or not. There would be no way for "every copy to turn a profit". Luckily no sane country requires you to do that. >>No company is giving out "free" products without making a profit just to go even on their initial investment. Profits appears when your revenue exceeds your costs which doesn't happen on the first or second (or sometimes 10000th sale). You are arguing for some completely different tax system which luckily we don't live under. >> If you do that you can actually calculate the amount of coffees you need to sell to turn a profit and if the business even makes sense in the first place. You can't calculate "if the business even makes sense in the first place". It's a bureaucrat's dream but it's not how the real world works. You make a bet and and hope it works out. I may or it may not (the usual case with businesses).

Leif24 2mo ago

Ok, fair enough. To focus on one line item I mentioned ("What about the fractional cost of the machine that actually puts the water and beans together to brew the coffee (you could do some sort of analysis based on purchase price / total number of coffees made over useful lifetime)") - my understanding is a capital expense like this is typically handled by amortizing it from revenue over the course of a few years (super easy, just cost of machine / useful lifespan). Just need to rework the formula to solve for fractional cost per coffee brewed instead of per year. The same process can be used for, say, the "royalty and license fees" Starbucks UK was paying. Just convert from fee per year to fee per coffee. So, the net effect of your big change is just reworking all the accounting from "per year" figures to "per coffee" figures? How does that improve anything about the world (other than giving accountants some more work that they will charge handsomely to do)?

bluecalm 2mo ago

>>Everything you named should be included in the price you charge for a cup of coffee. So the money you extract from it, minus the cost you named is your profit. When you first invest 100k and then sell something for 2$ you don't make a profit for a while. You may be arguing for some other tax but it's ridiculous to argue income tax should be paid until revenue > costs. >>If you dont make profit on that sale, I have bad news for your business idea. When doing business you often don't know if you will make profit or not. In the coffee example you don't know how many you are going to sell so it's impossible to "include costs in the cup of coffee" because that depends on how many you are going to sell and that's unknown. Your whole line of reasoning makes 0 sense.

sevenzero 2mo ago
My whole line of reasoning makes perfect sense given I worked in trades doing exactly what I talk about in a country with one of the most complicated tax systems there is. Prices are calculated by adding your costs into the base price which is common sense. If you do that you can actually calculate the amount of coffees you need to sell to turn a profit and if the business even makes sense in the first place. Every unit of coffee you sell should turn a profit. Which in turn should be taxed. Even cigarettes that probably only turn micro cents profit should be taxed by per unit sold. They even are, given their sales are heavily regulated. No company is giving out "free" products without making a profit just to go even on their initial investment.
- jacobjjacob 2mo ago
  Over what timescale do you amortize your investment by pricing it in? Do you earn back your $100k by selling $20 coffee? That wouldn’t be sustainable. So, this is where the loss comes in. You can’t realistically sell at a profit considering your capital investment if you aren’t carrying it over longer periods of time.
- bluecalm 2mo ago
  I am sorry but this is just nonsense and luckily I don't know any country where you are required to do that. I started a business myself, first I spent a lot of time making something and then I tried to sell it. I had no idea if people would buy it or not. There would be no way for "every copy to turn a profit". Luckily no sane country requires you to do that. >>No company is giving out "free" products without making a profit just to go even on their initial investment. Profits appears when your revenue exceeds your costs which doesn't happen on the first or second (or sometimes 10000th sale). You are arguing for some completely different tax system which luckily we don't live under. >> If you do that you can actually calculate the amount of coffees you need to sell to turn a profit and if the business even makes sense in the first place. You can't calculate "if the business even makes sense in the first place". It's a bureaucrat's dream but it's not how the real world works. You make a bet and and hope it works out. I may or it may not (the usual case with businesses).