VAN method
The van method is a way to calculate the cost of goods sold, which is a fancy way of saying how much it costs to make the things you sell (like a lemonade stand with cups, lemons, and sugar). So imagine you have a van and you want to use it to start a hot dog stand. Here's how the van method works:
Step 1: Take a picture of your van and write down how much it costs (your "van inventory").
Step 2: Fill your van with hot dog ingredients (like hot dogs, buns, condiments, etc.) and take a picture of what's inside. This is your "inventory."
Step 3: Sell your hot dogs and keep track of how much money you make.
Step 4: At the end of the day, take another picture of what's left in your van. This is your "ending inventory."
Step 5: To figure out how much it cost to make the hot dogs you sold, you subtract your ending inventory from your beginning inventory (what you had at the start of the day) and add up how much you spent on those ingredients. This is your "cost of goods sold."
Step 6: You can use this information to figure out how much money you made overall, and if you want to make a profit, how much you need to raise the price of your hot dogs or lower your costs (by buying cheaper ingredients or finding better deals on your van and supplies).
So basically, the van method is a way to keep track of your inventory (what you have to sell), your sales (what you actually sold), and your costs (what it cost to make what you sold) to help you run a successful business.
Step 1: Take a picture of your van and write down how much it costs (your "van inventory").
Step 2: Fill your van with hot dog ingredients (like hot dogs, buns, condiments, etc.) and take a picture of what's inside. This is your "inventory."
Step 3: Sell your hot dogs and keep track of how much money you make.
Step 4: At the end of the day, take another picture of what's left in your van. This is your "ending inventory."
Step 5: To figure out how much it cost to make the hot dogs you sold, you subtract your ending inventory from your beginning inventory (what you had at the start of the day) and add up how much you spent on those ingredients. This is your "cost of goods sold."
Step 6: You can use this information to figure out how much money you made overall, and if you want to make a profit, how much you need to raise the price of your hot dogs or lower your costs (by buying cheaper ingredients or finding better deals on your van and supplies).
So basically, the van method is a way to keep track of your inventory (what you have to sell), your sales (what you actually sold), and your costs (what it cost to make what you sold) to help you run a successful business.