When you're facing a backlog of unfinished jobs like many businesses today with supply & labor shortages, it can be a difficult situation to overcome. Watch this video to learn how.
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Read video transcription below.
If you have a 20% gross profit margin, which covers your cost, and your fixed cost, and your profit, your variable cost, then your break-even is 600,000. So, you're working very hard and you're creating a backlog, but what if you raised your prices, thereby raising your gross profit margin.
And if you could raise that by 10%, the amount of money you have to sell instead of 600, you only need $400,000 worth of jobs. That's a 30% reduction in the number of jobs you need to make the same money or you could sell more and have profit hitting sooner than it would under the old scenario.
Those are just some key concepts that when you look at your financial information, in tandem with your marketing information and your sales information, you could stop putting out fires and spend more time with the freedom you will gain by running your business like a CEO by the numbers instead of by the seat of your pants.
I'm going to finish up, but your goal is to... Here's the problem. It takes money to keep working, operating, and you have only one objective, which is to make more money. And that's what we're here to do, is help you look at those numbers, make sense of those numbers and use numbers to run your business more effectively.
At StructureM, we make it simple to beat your financial hurdles. We help you to create a customized growth plan that’s right for you, so you can enjoy a profitable, sustainable business. Apply for a free coaching session to get started.