How Do I Calculate Variable Costs?

How Do I Calculate Variable Costs?

- Objective today:     - Unit economics - like individual Lego building blocks that make up the overall profitability picture     - Revenue per unit     - Any cost during making and selling     - Connected to gross margin.         -              - Every % is a penny of each $ available to cover overhead - Concept:     - What makes it improve?         - Increase price         - Decrease variable expense         - Cost of product             - produce in bulk             - cut costs where customers don’t mind (value engineering)         - shipping             - negotiate better rates             - Offer free shipping above threshold         - advertising & commission             - Sell to existing audience             - Partner with other brands to sell to their customer     - Trade-offs         - Sometimes spending more advertising dollars or offering referral or sales commission can accelerate revenues to help cover overhead but decrease our gross margin % - Key Question + Action     - **What is a unit for you?**     - **What costs do you incur with each creation and sale of every unit?** ----------------- Want customized help building out a growth plan for your business? Schedule a free strategy call at Amplify.Business [http://amplify.business] Download free pdf guide at ForecastOnPurpose.com [http://www.forecastonpurpose.com] Connect on LinkedIn [https://www.linkedin.com/in/ben-cooper-amplify/] Watch episodes on YouTube [https://www.youtube.com/channel/UC9q7PZZjjA5M9hyRkYtLN8g/]

How Do I Predict Revenue?

* Objective today:  * Predict the revenue - Narrow the region of darkness instead of crossing fingers hoping to repeat * Concept:  * what are the building blocks behind we make money? * Number of Units x Revenue per Unit  * How many will I sell? * What is the right price? * Common mechanisms  * Product * Service * Subscription * How does it change over time? * Seasonality  * Q4 for consumer good always boosted by Black Friday & Cyber Monday sales * Organic growth  * Natural increase over previous year or month * Driven growth  * Ad spend * Sales efforts ----------------- Want customized help building out a growth plan for your business? Schedule a free strategy call at Amplify.Business [http://amplify.business] Download free pdf guide at ForecastOnPurpose.com [http://www.forecastonpurpose.com] Connect on LinkedIn [https://www.linkedin.com/in/ben-cooper-amplify/] Watch episodes on YouTube [https://www.youtube.com/channel/UC9q7PZZjjA5M9hyRkYtLN8g/]

How Do I Track My Progress?

So how will we actually reach the results we want? Now it’s time to connect the dots between where we are today and where we want the business to go. When we extrapolate historical financial patterns into the future, we are able to develop an initial baseline forecast that paints a picture of our current trajectory. This initial picture can be tailored to include known changes and upcoming investments. However, we don’t need to just blindly accept what we see in this first initial picture–-we are able to now influence the story by making some key performance shifts under the hood of the business. ----------------- Want customized help building out a growth plan for your business? Schedule a free strategy call at Amplify.Business [http://amplify.business] Download free pdf guide at ForecastOnPurpose.com [http://www.forecastonpurpose.com] Connect on LinkedIn [https://www.linkedin.com/in/ben-cooper-amplify/] Watch episodes on YouTube [https://www.youtube.com/channel/UC9q7PZZjjA5M9hyRkYtLN8g/]

How Do I Build A Growth Plan?

How did the business start?  What problem is it solving in the world? What are the current key decisions being considered? Who are the decision makers? How have revenue and expenses changed year over year? What kind of seasonality does your business experience? What are your current pricing methods and gross margins? What are your current total fixed period costs per month?  ----------------- Want customized help building out a growth plan for your business? Schedule a free strategy call at Amplify.Business [http://amplify.business] Download free pdf guide at ForecastOnPurpose.com [http://www.forecastonpurpose.com] Connect on LinkedIn [https://www.linkedin.com/in/ben-cooper-amplify/] Watch episodes on YouTube [https://www.youtube.com/channel/UC9q7PZZjjA5M9hyRkYtLN8g/]

How Do I Define My Purpose?

There are a handful of ways you can think about defining success: * What is your "flag in the distance" toward which everything should align? * What is the “why” or purpose behind what you do and care about? * When you get to the end of your life and look back, what do you hope to see? (Company) will (goal) by (date), which will allow me to (result). This is important because it means I will be able to (driving "why"). I know I will be on track along the way because I will (checkpoint) by (date). ----------------- Want customized help building out a growth plan for your business? Schedule a free strategy call at Amplify.Business [http://amplify.business] Download free pdf guide at ForecastOnPurpose.com [http://www.forecastonpurpose.com] Connect on LinkedIn [https://www.linkedin.com/in/ben-cooper-amplify/] Watch episodes on YouTube [https://www.youtube.com/channel/UC9q7PZZjjA5M9hyRkYtLN8g/]