Episode 34: Maximizing Your Profit Margins: The Ultimate Pricing Strategy
“So, when we talk about a blended rate, that means that we’re looking at, I pay an hourly rate of $25 an hour, but then I also have benefits that I’m paying for this employee.
It could be a 401k match; it could be medical, dental, or all of those types of things. Those are going to go into your blended rate. You’re also going to incorporate into their employer matching payroll taxes, your payroll processing fees, things that, when you’re looking at,
“Do I, as a business owner, incur $25 an hour, or is it 32 when I put all of the other things that that employee gets?”
– Andrea Jenson
Welcome to a brand new episode of the Cash Flow CFO Podcast. Join us on this episode as we dive into the topic of maximizing your profit margins. We will share valuable insights on how to identify and eliminate unnecessary expenses, negotiate better prices with suppliers, and optimize your pricing strategy.
We also discuss the importance of focusing on high-margin products or services and developing strong customer relationships to increase repeat business. Whether you’re a small business owner or a seasoned entrepreneur, you won’t want to miss this episode filled with practical tips and advice on boosting your bottom line. So, grab a pen and paper and get ready to take notes on how to maximize your profit margins!
Join us to learn the whole story!
“And what I also really like about having these resources and tools is if you have a management team, they can be measured on this stuff. This is stuff that they can see, and everybody has the clarity of if I hire that other person or if I invest in this product service, how is that going to flow through, and how is that going to affect my budget for my area of the company.
So, it gives you a lot of clarity. It gives you a lot of peace of mind that you’ve got a plan. So, every dollar in your business should have a purpose and a plan for it, and this is how you accomplish that.”
– Andrea Jenson
Maximizing Your Profit Margins: The Ultimate Pricing Strategy
Pricing your products or services can be a tricky task, but it’s one that can make all the difference between success and failure.
It’s essential to understand the value of your product or service. What makes it unique? What problem does it solve for your customers? By understanding the value you offer, you can set a price that reflects this and ensures that you’re not undervaluing your offering.
Next, consider your target audience. Who are your ideal customers, and what price point will they be willing to pay? Conducting market research can help you to determine this, and you may also want to consider offering different pricing tiers to cater to different segments of your audience.
“One of the things that I know happens in the marketing discipline is they talk a lot about a value ladder and moving your clients through a value ladder. So, it’s very common that businesses have what’s called a loss leader.
So, you might have, like, for example, we have an engineering client who does what’s called a loss leader. So they do a portion of a small service that they do, and they price it very competitively so that they can get their foot in the door because they know that if they can get their foot in the door and get that client in to take up their offer on a small level, that they’re going to wow them and the client’s going to hire them for the whole job.”
– Andrea Jenson
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