Posts Tagged "profit margin"

Smart Pricing Strategies For Entrepreneurs

Posted by on Jan 18, 2017 in Blog

Smart Pricing Strategies For Entrepreneurs

Effective pricing can be a difficult thing to ascertain. While you want to offer a great rate to your clients, you also want to make sure you are covering your costs. And then you have competitors to think about. Here are some smart pricing strategies for entrepreneurs and businesses alike. Introductory Offers An introductory offer is a great way to get your clients to try before they buy. It could be an offer of something for free or a heavily discounted product or service. Once you have your customers in your sales funnel, then you can slowly work your way up to achieving larger purchases. Competition-led Pricing When you are less experienced in the business world, it can be difficult to discern how you differ from your competitors. You may need to charge the same as your competition to make sure you are starting out on an even keel. Once you have been in the industry for a while, you can then work out whether your prices need to go higher or lower than your competitors to start seeing a real difference. Loss Leaders Is there one product that you can offer at a low price to bring your...

Read More

Why is Your Profit Margin Important?

Posted by on Jun 29, 2016 in Blog

Why is Your Profit Margin Important?

As a business owner, there are a lot of figures that you need to keep your eye on. Several of these statistics serve as critical indicators of the overall health and long term stability of your company’s finances. One of the most important of these statistics is your profit margin, as it provides a quick glimpse into your company’s efficiency and performance. Since your profit margin is such a bellwether of your company’ overall condition, it can have a significant impact on your strategic planning process. Understanding it also enables you to take quick action and adjust course when there are signs of financial difficulty. Understanding Your Profit Margin There are two figures that you need to keep in mind when determining your profit margin, and that is your gross profit margin and your net profit margin. Determining these two statistics is generally a straightforward calculation. Your company’s gross profit margin is determined by dividing gross profit by its total income. You can define your net profit margin by dividing your company’s net income by its total income. Once you have determined these two figures, you can then use them to compare the performance of your business with other...

Read More

3 More Steps To Managing Pricing: Lessons From The Restaurant Industry That Can Work For You

Posted by on Jun 25, 2013 in Blog

3 More Steps To Managing Pricing: Lessons From The Restaurant Industry That Can Work For You

This week we are following on from the last post and bringing you some more steps to help stay afloat, even in a challenging economy. Consider Price Bundling to Draw in Budget Conscious Customers and to Make a Profit Who doesn’t love a deal? Many individuals refuse to spend money unless they think they are getting a deal. Once persuaded that they are getting a “good buy,” they will often spend more money that they originally planned. Successful restaurants know this, and so they offer bundled deals, such as the buy two entrees and get one of equal or less value for half price. Most other types of businesses have the ability to offer a modest discount to those who purchase more than one product or service, and can therefore reap the benefits when they increase their sales and earn the chance to impress new customers. Love What You Do and Delegate the Rest It’s important for many reasons to find joy in the work that you do. It’s also important to have a keen understanding of the costs and expenses as well as the revenue flow from your operation. This can be difficult if you are like many...

Read More

3 Steps To Managing Pricing: Lessons From The Restaurant Industry That Can Work For You

Posted by on Jun 20, 2013 in Blog

3 Steps To Managing Pricing: Lessons From The Restaurant Industry That Can Work For You

The restaurant business is notorious for its razor thin profit margins. While you might think it outrageous to pay $50-$100 (or more) for a great steak dinner that features a top grade of beef and is accompanied by all the trimmings, most restaurants are lucky if they keep 5% or less of their charge for a meal. The rest is eaten up by various costs. To make a profit and stay in business, most employ certain steps to manage their prices and costs. Regardless of what industry you happen to be in – if you are in business to make money – the following steps can help you to be more successful and to stay afloat, even in a challenging economy. Don’t Assume – Do Your Homework and Conduct a Cost Analysis When it comes down to deciding what you are going to charge for a product or service, whether a meal, childcare or anything else, it pays to be exact in your calculations. Don’t just assume you know the actual cost of anything in your operation without a proper cost analysis of each ingredient or each component of your business. Know how much everything costs, and stay on...

Read More