“Profit is the most important ingredient in business. It’s the same with a person’s life—you’ve got to have profit in your life to grow.” -Warren Buffett
 
Understanding the profitability of your work is essential to ensuring you’re getting paid what you’re worth.
 
Many business owners I’ve spoken to are so focused on moving forward that they haven’t taken the time to assess costs and determine if a job was truly profitable.
 
Whether you’re running a $100 million business or a $1 million business, the process of measuring profitability is the same. It’s not just about a small margin of profit, it’s about ensuring your business can cover its overhead and salaries, while having enough working capital for growth.
 
If your projects aren’t meeting these criteria, it’s important to understand why and take steps to resolve the situation. Creating a budget can serve as a guide to determine how profitable your jobs or services need to be to achieve your desired bottom line and cash flow.
 
Our free Pricing for Profitability Model, available to download below, helps you determine the prices you need to set to achieve your desired profit margin on each project.
 
Here’s how it works:
 

  1. Input labor hours and wage rate (or a total)
  2. Estimate tax & benefit % of wages
  3. Input material quantities and cost (or a total)
  4. Include outside/additional costs/contingency (if applicable)
  5. Add commission % (if applicable)
  6. Set your targeted/budgeted profit margin

The model will then calculate the price you should charge to achieve your desired profit margin, based on the costs you’ve identified.
 
Enter your name and best email address into the form below to receive the “Pricing for Profitability Model” absolutely free.
 
P.S. I’m offering the working spreadsheet with all the formulas for free. Contact Patty to schedule a discovery call, and let’s optimize your pricing strategy!

Your CPA Shouldn’t Be Your CFO!

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