That's a question I get now and then and I wish I got it more. Why? Because someone asking that question at least tells me that they are paying attention to their financials and associated goals/metrics.
I don't have an accurate number to give you but I would venture to guess that the majority of small technology business owners out there with this problem make what turns out to be a simple math error. This causes profits not to line up with what was expected. It also leaves a considerable amount of money unnecessarily on the table.
Barring the fact that it could certainly be a case of a fixed fee item taking longer than anticipated and also assuming they know their internal costs, most times the answer lies in not understanding the difference between a mark-up on your costs and establishing a profit margin.
Watch this 5 minute video to see what I mean:
Leave any comments or questions below. And feel free to contact me about this or any other business topic as I'm always looking for blog post material.
To Your Business Success-
George Sierchio
The Consultant's Coach
Posts
1 comments:
Great explanation George. In my experience many entrepeneurs do not take into event all of their true costs. All to often when I talk with a customer or friend talking about Schedule C, I ask what business expenses they had, and they say what business expenses. That just puzzles me and at the same time scares me.
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