Pricing Archives | Numbers Knowhow

Pricing For Profit: 5 Key Numbers

Mahmood Reza — Mon, 23 Oct 2023 10:47:16 +0000

Wondering how to price your products or services so you can make a profit? It’s not as simple as it seems because it involves several things to consider. That’s why figuring out the right price is one of the biggest challenges business owners face. There are two main financial outcomes of pricing and it’s so important to understand them. And to know how to calculate them. Once you know what those two outcomes are, the next step is to consider five key factors that will help you set a price for your product or service that meets your business objectives. And finally, I’ll show you a FREE online pricing calculator that makes it easy to do all this math for yourself. Watch this video now and learn how to price your products or services for success! How to price your products or services so you can make a profit You need to make sure you’re covering your costs and making a profit. In this video, I’ll explain the two main financial outcomes you need to meet: Time availability, and Quantity of time. These two are essential to take into consideration because nobody can devote all of their time to […]

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Using Target Costing For Pricing

Mahmood Reza — Mon, 31 Jul 2023 10:29:30 +0000

Do you want to reduce your costs by 25% to 30%? If so, then target costing is the right choice for you. Therefore pricing using target costing can help you cut costs without sacrificing quality. Traditional and target costing – differences The two methods share things in common but also have differences. You choose the method most appropriate for your target customers and product mix. Traditional costing (or cost-plus costing) is the most used method for pricing goods and services. It’s based on adding an average overhead rate to the costs of manufacturing products. The focus of target costing is reducing waste from the start of production. Don’t wait until products are made. Moreover, this means that every step of the process is designed with cost-cutting in mind. You gain better prices and margins for your business. Target costing was developed by Toyota Motor Corporation to reduce costs while increasing the quality of its products. It’s now widely used throughout many industries from automotive to consumer electronics. Target costing has been around for many decades, much longer than cost-plus costing. Listen now to find out more about how target costing works! Conclusion If you’re interested in dealing with pricing and […]

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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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Why A Business Must Make A Profit

Mahmood Reza — Tue, 21 Feb 2023 10:33:27 +0000

Making profit must be at the top of your business goals – ignore that at your peril. Firstly, I am going to tell you why making profit is vital for you and your business. Secondly, I will tell you how you go about making profit. But before we go into that, let’s think about another very important question: Why are you in business? We all have our reasons for being our own boss. It could be financial independence, being more in control, helping others, freedom and flexibility. Maybe it’s life circumstances, a change of scenery, grabbing opportunities – and making money! For myself, I went into business over 28 years ago, started from my own back bedroom, because I wanted more control. I wanted to help people, I wanted to make an impact on their lives, I wanted to have that independence, make my own decisions, and make money. Why a business must make a profit – overview Making a profit is vital for your business. It is the fuel that keeps it going and helps you to grow. Without a profit, your business will eventually fail. And if you’re not making enough of one, then it’s time to […]

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