The Business Case for Safety

To recover the profits lost, additional sales are needed !
Contact Information:
Wayne Vanderhoof, CSP, WSO-CSS
Safety Consultant/President
RJR Safety Inc.
164 Petroleum Ave
Claysville, PA 15323
724-809-4234 cell
724-663-5163 fax
wayne@rjrsafety.com

RJR Safety Inc.

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Wayne Vanderhoof
CSP, WSO-CSS

Now that the profit margin is known, the next step is to determine is how much in sales is needed to recover the lost profit due to an injury. To determine this, divide the cost of the injury by the profit margin in decimal format. This will give the amount in additional sales needed to make up for the cost of the injury (lost profit). When the indirect (uninsured) cost of an injury (lost profit) is $10,000.00 and the profit margin is 1%, it will take  $1,000,000.00 in additional sales to make up the cost of the injury (lost profit) ($10,000.00/.01 = $1,000,000.00).

 

Formula related to Additional Sales:

Additional Sales = Cost of injury/ Profit Margin

Example: $5000.00 Additional Sales = $500.00 Cost of Injury/ 10% Profit Margin

 

 

RJR Safety Inc.

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