gross profit Archives | Numbers Knowhow

How To Price Your Products

Mahmood Reza — Mon, 17 Apr 2023 07:33:09 +0000

Are you sure that you’ve priced your products well? Or maybe you’re at the beginning of your business journey and you’re wondering what the best way to do it is. This blog will teach you how to price your products based on different pricing strategies so that you can avoid making a mistake from the early days. In addition, you need to know how to price your products when developing pricing strategies for your business. If your business sells things (if you are a retailer or a manufacturer), there is a different approach to pricing services. Overall, some things stay the same. Pricing must play its part in: meeting your business and marketing goals, and making a profit on a sustainable and long-term basis. Whatever model you choose to price your products will not be a one size fits all. You will have different pricing approaches to use within your business toolbox. Purpose and objectives drive the approach. Things to consider before setting prices Determine an accurate costing for the product or project. Estimate the target profit required for the product, project, or year to make the business feasible. This can be determined by a percentage – such as […]

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Gross Profit & Your Business

Mahmood Reza — Mon, 17 Apr 2023 07:19:17 +0000

Knowing your gross profit is one of the most important steps to understanding the health of your business. Gross profit is the amount of money a company makes after subtracting the cost of goods sold from total revenue. In this blog, we are going to look at what gross profit means for your business. Your business journey map must have profit as a destination point. When you set your numbers dial to profit, you’ll be looking at gross and net profit. In the world of numbers, gross does not mean unpleasant or disgusting – though making a rubbish gross profit is not good. What does gross profit mean for your business? Firstly, let us take a closer look at what we are talking about. And the best way to go about it is to illustrate using an example. So, let’s imagine that Govan sells second-hand trainers online at £100 per pair. Now, if he sells twenty of those, he makes £2,000 in sales. Congrats to Govan, but that’s not his profit. He needs to buy and clean those trainers before selling them. The costs are £40 a pair. This means that Govan makes £60 profit for each pair he […]

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How To Judge Your Financial Performance

Mahmood Reza — Tue, 11 Apr 2023 08:59:07 +0000

How do you assess financial performance? It’s not that straightforward, isn’t it? Knowing how to judge your financial performance can be tricky. It’s because many factors come into play. Plus, it’s not always easy to know where you stand. You can get a good idea of how you’re doing if you turn to your numbers – more specifically, your income and expenses. Take a careful look at them, and it should be much clearer where your business is at the given time. In the words of Dietrich Bonhoeffer, “Action springs not from thought, but from a readiness for responsibility.” So, to be able to lead your company to a brighter tomorrow, you need to be informed about the facts, take responsibility for the current situation and plan away based on reasonable data. Care for some tips to get you started? Read on to learn more. Know your income and expenses If you’re running your own business, it’s important to keep on top of your financial performance so you can make sure you’re making a profit. But how do you know if you’re doing well or not? Here are a few tips on how to judge your financial performance. Regardless […]

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What Is Profit In Business?

Mahmood Reza — Thu, 02 Feb 2023 18:51:50 +0000

Profit should be one of your main business goals. Profit is used to build sustainability, monitor, manage, and measure your performance. But what is profit in business, and why is it so important? For most people, profit is the difference between money in and money out. When people say money, they mean notes and coins, what’s in their bank account. That sounds straightforward and sensible, nice and easy to calculate. However, we are talking about the world of numbers and business here! It’s time to burst the bubble. Profit is not measured in terms of money in and money out. When you calculate profit it’s a completely different ball game. Accounting jargon explained Firstly, before we answer what profit in business is, you need get familiar with some accounting jargon. Don’t worry – I have my jargon converter at the ready! Turnover. When your business provides your promise, and your customer becomes responsible for paying for that promise you have turnover. Your promise BTW is the products and services you sell. So, turnover is the financial value of the products and services you have provided to your customer. Revenue is recorded when the sales event occurs, e.g. products delivered […]

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