Know where the business earns its money, and where it does not.
Total profit can hide large differences between products, customers, services and locations. Profitability analysis shows where value is created, where it leaks, and where management attention should go.
Revenue is growing. It is less clear whether profit is growing with it.
Many businesses price on history or competitor reference, allocate overhead loosely and do not know the true margin on individual products or customers. Growth in the wrong areas can quietly reduce overall profitability.
Common signs
- Gross margin moves without a clear explanation
- Prices have not been reviewed against current costs
- Some customers or jobs feel unprofitable but nobody has measured it
- Hiring and capacity decisions lack a financial case
A structured approach, led by the principal.
- 01
Define the cost picture
Separate direct, variable and fixed costs, and agree a reasonable allocation approach.
- 02
Measure margin by segment
Calculate profitability by product, customer, service line, project or location.
- 03
Test pricing and mix
Model pricing changes, volume shifts and cost-structure options.
- 04
Recommend focus
Summarize where to protect, grow, reprice or reconsider, with the reasoning shown.
What you receive.
- 01Product and SKU profitability analysis
- 02Customer profitability analysis
- 03Gross and contribution margin review
- 04Pricing analysis and scenarios
- 05Cost structure and break-even analysis
- 06Budget versus actual and variance review
- 07Growth, hiring and capacity scenarios
- 08Operational finance analysis
Final scope is agreed in writing for each engagement.
- Businesses with many products, customers, or service lines
- Owners considering a price increase or change in mix
- Companies where growth has not translated into proportionate profit
How the work is usually arranged.
Profitability review
A defined analysis with findings and recommendations.
Pricing project
Focused modelling ahead of a pricing or mix decision.
Ongoing tracking
Margin reporting built into the monthly management pack.
Discuss profitability & business performance for your business.
A first conversation is an opportunity to describe where the business is, what is not working, and what you need. You will speak directly with the principal.