MAKING DISCIPLINED PRICING DECISIONS
Managing your bottom line starts with the very first decision: To discount or not to discount? It's important to grow sales, but growing revenue without being mindful of the impact on the bottom line can quickly put you in a financial bind. See what happens when your Gross Margin drops to 32%..... after administrative expenses, operations expenses and royalties, you have a profit margin of 1%. Given the risk and the fact that your staff on that case are not available for other opportunities, does it make sense? Maybe, maybe not. Yes, you've been at this business long enough to know what's profitable and what's not, but hold yourself accountable. Run the numbers and go forward with your eyes wide open. Set a goal of achieving a 43% Gross Margin.
Managing your bottom line starts with the very first decision: To discount or not to discount? It's important to grow sales, but growing revenue without being mindful of the impact on the bottom line can quickly put you in a financial bind. See what happens when your Gross Margin drops to 32%..... after administrative expenses, operations expenses and royalties, you have a profit margin of 1%. Given the risk and the fact that your staff on that case are not available for other opportunities, does it make sense? Maybe, maybe not. Yes, you've been at this business long enough to know what's profitable and what's not, but hold yourself accountable. Run the numbers and go forward with your eyes wide open. Set a goal of achieving a 43% Gross Margin.
- From ABS, go to REPORTS --> CUSTOMER --> CUSTOMER ANALYSIS REPORT
- Any clients with a Gross Margin below 40% should be considered for repricing
- Be careful to factor the hidden expenses of high-maintenance or high admin clients, especially for cases below 40%
P & L Benchmarking Calculator
This calculator is based on the bench marking survey published by the Home Care Association of America. Due to the unique business profile of a BrightStar franchisee, data fields have been added for the purpose of 'normalizing' Owner Discretionary Income. An accurate ODI figure will allow you to better evaluate the equity you've built in your business.
This calculator is based on the bench marking survey published by the Home Care Association of America. Due to the unique business profile of a BrightStar franchisee, data fields have been added for the purpose of 'normalizing' Owner Discretionary Income. An accurate ODI figure will allow you to better evaluate the equity you've built in your business.
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