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Will You Add? - Dangers of Discounting
It isn't easy to get into the field of medical billing and not get hammered by all the costs. It's bad enough having to deal with the costs that you are told about up front, but when you get hit with costs that nobody told you about, that's when things can get very frustrating. The purpose of this article is to prepare you for what you're in for should you decide that you want to get into the medical billing profession.The f
A brief example will demonstrate this:
Every successful business, large and small, that has a winning strategy follows the same basic formula for doing so. While all businesses have their own unique strategy, certain consistent elements can be seen throughout all the prosperous ones. Committing the time and energy to doing these things determines the success of a business. The following is a list of 8 things all flourishing businesses have in common:1. Goal Sett
There is no doubt that discounting your price could provide you with a quick win and, even as a policy, terms like 10% off for cash payments can occasionally improve overall sales. However, without careful planning, discounting can severely impact on your business’ profitability.
Apart from discounting, there are many ways to handle price objections. But for brevity of this article, we will look at discounting through the bean counter’s eyes – the finances.
Your accountant will be quick to point out the obvious effect of discounting: a discount is a cost that comes directly off of bottom line profits. But there is another effect of discounting that is often overlooked. Have you considered, in your particular business, what extra effort is required to recover your “lost” profits? You may have more sales and, sometimes even a higher turnover, but do you know exactly how your discount affects the profitability of your business?
A brief example will demonstrate this:
Every morning you wake up, eat and -– most days of the week -- you go to work. By that time you have already finished a set of daily habits. But at work, there are even more waiting for you; starting with the computer: Switch on.And then, what do you do next: open your e-mail program, “You’ve got mail” or your internet browser? And in the last case, what is the start page of your browser? The (local) newspaper,
There is no doubt that discounting your price could provide you with a quick win and, even as a policy, terms like 10% off for cash payments can occasionally improve overall sales. However, without careful planning, discounting can severely impact on your business’ profitability.
Apart from discounting, there are many ways to handle price objections. But for brevity of this article, we will look at discounting through the bean counter’s eyes – the finances.
Your accountant will be quick to point out the obvious effect of discounting: a discount is a cost that comes directly off of bottom line profits. But there is another effect of discounting that is often overlooked. Have you considered, in your particular business, what extra effort is required to recover your “lost” profits? You may have more sales and, sometimes even a higher turnover, but do you know exactly how your discount affects the profitability of your business?
A brief example will demonstrate this:
Autologica presents the third part in a series of articles that address common problems and issues faced by family-owned businesses, based on an interview between Al McClymont, CEO of Autologica Dealer Management Systems, and J.C. Aimetta, an expert and coach who specializes in family-owned businesses.Al McClymont: It seems obvious that in every family-owned business there will be members that will work in the company,
Apart from discounting, there are many ways to handle price objections. But for brevity of this article, we will look at discounting through the bean counter’s eyes – the finances.
Your accountant will be quick to point out the obvious effect of discounting: a discount is a cost that comes directly off of bottom line profits. But there is another effect of discounting that is often overlooked. Have you considered, in your particular business, what extra effort is required to recover your “lost” profits? You may have more sales and, sometimes even a higher turnover, but do you know exactly how your discount affects the profitability of your business?
A brief example will demonstrate this:
There is an art to resume writing and not everyone gets to master it. While you may have years of extensive experience in a professional field, this in no way guaranties that you will be an excellent resume writer. Regardless of your employment experience, poor writing skills will certainly undermine your chance of interviewing and obtaining that dream job.Before even picking up your pen, or sitting down at your computer to
A brief example will demonstrate this:
Recently, in both the entertainment and promotional products industries, companies and individuals have started using promotional products to function in more than one way—thus getting more for your money. Event and party planners use this practice to not only stand out with an original idea and approach, but to also make their budget dollars go further. Follow this lead and not only save some money in your budget, but also, join the
A brief example will demonstrate this: WidgeCo makes and sells widgets, which normally retail at $100 each. 500 widgets are sold each month, giving WidgeCo a monthly turnover of $50 000. The direct cost of producing and selling each widget is $60, which is made up of raw materials, sales commissions, transport etc. These variable costs are aggregated each month into a cost of sales figure of $30 000. In addition to cost of sales, WidgeCo spends $10 000 on fixed costs (FC) such as rent and salaries.
We now know that WidgeCo’s gross profit percentage (GPP) for its widgets is 40%. WidgeCo’s breakeven (BE) turnover is $25 000, calculated by the formula BE = FC / GPP. WidgeCo is therefore profitable, with net profit standing at $10 000 and net profitability (NPP) at 20%.
Now what say WidgeCo decides to run a promotion, offering a 10% discount for one month. Turnover will drop by $5 000, but because the same volume of widgets is being produced, cost of sales remains $30 000. GP is therefore $15 000 and NP is reduced by the s
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