Atlasview Equity Partners’ Post

Are you pricing your goods and services correctly? Understanding your gross profit margins can help you set the right rates for your organization. 1. Understand Your Costs: Break down all your overhead costs including salaries, benefits, and equipment. This will help you undertstand how much cashflow is needed to cover these expenses, and achieve your desired margin. 2. Benchmark Prices: Use your gross profit margin to evaluate how your pricing compares to your specific industry. Ensure your rates are competitive and profitable. 3. Make Adjustments as Needed: If your gross profit margin is lower than desired, consider areas where you can lower costs and adjust your prices. Make sure your prices reflect the value of your services and cover all your costs. 4. Monitor and Adapt: Regularly track your gross profit margin to identify trends and make proactive adjustments to your pricing strategy. This can help you stay profitable and competitive. 4. Monitor and Adapt: Regularly track your gross profit margin to identify trends and make proactive adjustments to your pricing strategy. This helps you stay profitable and competitive. Knowing your gross profit margin is essential to developing a pricing strategy for your goods and services.  #affable #financialfitness #strategy

Are you pricing your goods and services correctly? Understanding your gross profit margins can help you set the right rates for your organization. 1. Understand Your Costs: Break down all your overhead costs including salaries, benefits, and equipment. This will help you undertstand how much cashflow is needed to cover these expenses, and achieve your desired margin. 2. Benchmark Prices: Use your gross profit margin to evaluate how your pricing compares to your specific industry. Ensure your rates are competitive and profitable. 3. Make Adjustments as Needed: If your gross profit margin is lower than desired, consider areas where you can lower costs and adjust your prices. Make sure your prices reflect the value of your services and cover all your costs. 4. Monitor and Adapt: Regularly track your gross profit margin to identify trends and make proactive adjustments to your pricing strategy. This can help you stay profitable and competitive. 4. Monitor and Adapt: Regularly track your gross profit margin to identify trends and make proactive adjustments to your pricing strategy. This helps you stay profitable and competitive. Knowing your gross profit margin is essential to developing a pricing strategy for your goods and services.  #affable #financialfitness #strategy

Here's a good exercise if you’re looking to optimize your expenses and cash going into 2025: 1 - Get a report of your spend by vendor for the last 3 years 2 - Compare each spend to your income in that year (will be a %). For example, Vendor A divided by 2024 income so far. 3 - Figure out the top 10 vendor spends compared to income for each year. 𝗡𝗼𝘄 𝘁𝗵𝗮𝘁 𝘆𝗼𝘂 𝗵𝗮𝘃𝗲 𝘁𝗵𝗶𝘀, 𝗹𝗼𝗼𝗸 𝗮𝘁: is the spend per vendor going up or down in the last 3 years? That will give you better info on which ones to focus on For the ones that you're spending the most with year over year: 🔹 Can you negotiate better pricing? If you’ve been spending a lot of money over the last 3 years with them, there's some bargaining power on your side there 🔹 Can you negotiate better payment terms? This will help with the cash flow 🔹 Check if there are alternatives out there that would work better. Be careful with this one though - don't get enamored by lowering cost at the expense of quality. Save this and do it every year. #financialpuzzlessolved #planning #budget

Operating profitability ratios: 3) operating profit margin: The operating margin measures how much profit a company makes on a dollar of sales after paying for variable costs of production, such as wages and raw materials, but before paying interest or tax. It is calculated by dividing a company’s operating income by its net sales. Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Very Important ratio 1. Gross Profit = Sales - Cost of Goods Sold 2. Gross Profit Margin = (Gross Profit / Sales) x 100 3. Operating Profit = Gross Profit - Operating Expenses 4. Operating Profit Margin = (Operating Profit / Sales) x 100 5. Net Profit = Operating Profit - Taxes and Interest 6. Net Profit Margin = (Net Profit / Sales) x 100 7. Return on Investment (ROI) = (Gain / Cost) x 100 8. Return on Equity (ROE) = (Net Profit / Shareholder Equity) x 100 #accouting #investoreducatiob

Do your employees believe in your pricing? The answer to this question can significantly impact your company's bottom line. Some companies understand that their pricing is not influenced by what others charge, but rather by gathering their actual costs of doing business and determining the appropriate hourly rate to generate profit. This approach ensures profitability and provides a foundation for justifying the rates charged. By having a detailed process for setting rates based on actual costs, you can ensure employees trust your pricing and maintain profitability... https://lnkd.in/ggPaKrdU

Last week, we took a look at sales assumptions and why they are so important to your forecasting. Technically, you should have a basic assumption for every financial statement item in order to project your cash flow. If the particular expense is a steady amount, the assumption can be as simple as "same as last year" Today, we’re going to take a deeper look at 2 important expenses: • Cost of Goods: These expenses are the cost to manufacture your product or deliver your services. The total cost will often fluctuate together with sales volume. Other than the correlation with your sales assumption, consider these other questions: are raw materials or wages for production personnel increasing at a certain rate over the forecast period? is our efficiency going to improve or decline as a result of changes in the sales volume? • Payroll cost: Payroll costs includes both wages and payroll taxes. The payroll taxes would often increase in line with wages. Here are some questions to consider: Do you plan to hire any new employees over the next year? Pay raises or Bonuses? Will you choose to invest in more people or technology to meet changes in sales volume? Take the time to document your assumptions. You will then be able to understand your rationale when you compare your actual numbers vs. projection or prepare the projection in the following year. Business owners often concentrate on the operating profit impact to cash flow forecasts, but forget about the capital asset and financing changes. Next week we are going to dive into the importance of considering those assumptions in your calculations. #BusinessForecasting #FinancialPlanning #SmallBusinessGrowth #EconomicIndicators #BusinessStrategy #ThryveGroup

Last week, we took a look at sales assumptions and why they are so important to your forecasting. Technically, you should have a basic assumption for every financial statement item in order to project your cash flow. If the particular expense is a steady amount, the assumption can be as simple as "same as last year" Today, we’re going to take a deeper look at 2 important expenses: • Cost of Goods: These expenses are the cost to manufacture your product or deliver your services. The total cost will often fluctuate together with sales volume. Other than the correlation with your sales assumption, consider these other questions: are raw materials or wages for production personnel increasing at a certain rate over the forecast period? is our efficiency going to improve or decline as a result of changes in the sales volume? • Payroll cost: Payroll costs includes both wages and payroll taxes. The payroll taxes would often increase in line with wages. Here are some questions to consider: Do you plan to hire any new employees over the next year? Pay raises or Bonuses? Will you choose to invest in more people or technology to meet changes in sales volume? Take the time to document your assumptions. You will then be able to understand your rationale when you compare your actual numbers vs. projection or prepare the projection in the following year. Business owners often concentrate on the operating profit impact to cash flow forecasts, but forget about the capital asset and financing changes. Next week we are going to dive into the importance of considering those assumptions in your calculations. #BusinessForecasting #FinancialPlanning #SmallBusinessGrowth #EconomicIndicators #BusinessStrategy #ThryveGroup

Do your employees believe in your pricing? The answer to this question can significantly impact your company's bottom line. Some companies understand that their pricing is not influenced by what others charge, but rather by gathering their actual costs of doing business and determining the appropriate hourly rate to generate profit. This approach ensures profitability and provides a foundation for justifying the rates charged. By having a detailed process for setting rates based on actual costs, you can ensure employees trust your pricing and maintain profitability... https://lnkd.in/eR-R9i5v

When it comes to KPIs, my favorite is gross margin. Boring, I know, but it just has everything. Why? Because it gives a clear snapshot of overall profitability, service by service, and client by client. Tracking gross margin helps me measure employee efficiency by attributing labor costs to specific clients or jobs. Every wage dollar is accounted for, ensuring that our financial picture is crystal clear. Plus, our subscriptions are categorized as either overhead or client-based, allowing for precise allocation. This meticulous tracking means I can quickly identify if we're losing money on particular clients or services and make informed decisions to keep our business on a profitable path. 👉 In the end, a solid gross margin number is what gives us greater efficiency and profitability. #KPI #GrossMargin #Profitability #Efficiency #FinancialManagement