Episode 22: Understanding the Significance of Your Profit Margin ft. Christopher Wick
“As entrepreneurs, we know that what got you to where you’re at, usually is that grit and determination, and whatever you’re doing, you’re really good at it, because people just keep buying from you.
So, then it becomes, as your business, evolves, that’s when you really get to bring in the experts to prop you up and support you in where your weak spots are. A lot of times that is the accounting and the finance.”
– Andrea Jenson
Welcome to a brand new episode of the Cash Flow CFO Podcast. Joining me today is Christopher Wick. Christopher is a heart-centered businessman and has a knack for numbers. Christopher is an entrepreneur who, by age 30, had helped over 500 businesses and received over 14 accolades. Christopher has founded, acquired, and sold several companies in marketing, e-commerce, real estate, retail, and investing.
We’ll discuss several topics, including what distinguishes one business from another that Christopher could consider investing in, buying, or collaborating with. Any industry has several companies offering similar or comparable services to the same clientele. The companies with the best chances of success stand out from the crowd and convince customers to choose them over rivals.
In this episode, we’ll talk about the cost of goods sold, his experience working with businesses with a financial staff versus those without, and what makes an outstanding entrepreneur. All that and more!
Join us to learn the whole story!
“What is truly part of my cost? Even if you’re a consultant, even if you’re a coach, there is a direct cost to that, and that should be in the cost of goods sold.
So, you’ve got better control over your margins. And of course, the Yellow Brook Road, I want to take people down, is the better your margins, the better your valuation, and the better your valuation, the better exit you’re going to have in your business, which is super attractive and super fun.”
– Christopher Wick
Understanding the Significance of Your Profit Margin
It’s critical to keep track of your profit margins and be aware of them. Your company needs to generate revenue to stay afloat, and keeping an eye on your profit margins will help you determine how well the business is doing and whether it has room to expand. You should be aware of your profit margins whether you run a large corporation or a small business.
One of the first tasks Andrea gave their CFO clients involved analyzing their margins and making their business profitable.
Your business’s profit margin provides information on how much money it produces, how healthy it is overall, and whether it is having issues.
“We’re talking about making your business profitable and understanding your margins. Huge! That’s one of the first exercises we put our CFO clients through is we have them spell out every single position, anybody in their company that touches it, to deliver on the sale.
Any material, if it’s software you have to buy specifically to deliver on that sale, it goes in COGS for our analysis. Because if your COGS is 40 to 50% of your sales price, you’re sitting pretty. But a lot of people, as you say, are kind of cheating themselves because they’re not capturing the full picture of what it takes to deliver on that sale, and therefore they think,
“Oh, I don’t understand why I don’t have any money.”
– Andrea Jenson
Want to get in touch with Christopher Wick?
LinkedIn: https://www.linkedin.com/in/christophermwick/
