READOS / Business
Pricing, Margins and Profitability
Setting prices, protecting margin, understanding break-even and the costs that decide whether a business makes money.
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- 01Pricing your product or service: cost floors, customer value, buying units and life-cycleA practical pricing method: know your full cost, choose your market position, quantify the value you create, understand who decides, count the alternatives and price for the life-cycle.
- 02Gross margin: the quickest test of pricing powerWhy gross margin is often the first number to check when judging a business, what high and low margins usually signal, and how founders can design for healthy margins.
- 03Discounting without destroying your margin: when to discount, which types work and the maths to check firstDiscount strategy for small businesses: good reasons to discount, fifteen discount types, the extra volume a discount needs to break even, and how to avoid training customers to wait.
- 04What a discount request is telling you, and who should see your cost floorA discount request reports either buyer alternatives or objections to your offer, and each needs a different fix. How to read requests, price on value and decide who sees cost floors.
- 05Price and patience: when great businesses become good investmentsA great business is not always a great purchase. The conditions under which Buffett has bought and sold durable businesses, and the patience the approach demands.
- 06Two breakeven numbers every owner should know: your monthly revenue floor and the rent-or-buy crossoverFixed costs divided by contribution margin is the revenue you need each month to stand still. How discounts and commitments move it, why cash differs, and how to use breakeven to rent or buy
- 07The one-third rule: a simple benchmark for product cost, operating cost and profitHow the one-third rule splits revenue into product cost, operating cost and profit, how to apply it to manufacturers and services, what it reveals about your business and where it falls short.
- 08Throughput is not wealth: growing without running down the assets you depend onRevenue and output measure flow. Equipment, skills, relationships and resources are the stocks that produce it. How to tell whether growth is building those stocks or quietly using them up.
- 09Overheads, research and the cost of standing stillHow overheads and research spending reveal whether a business must keep running just to stay in place, and what product businesses can learn from that.
- 10Controlling costs without cutting quality: know your costs, your suppliers' costs and your utilisationA practical guide to cost control for product and manufacturing businesses: understand cost of goods sold, materials, labour, variable costs, equipment utilisation and cash.
- 11Customer lifetime value, acquisition cost and retention: the numbers behind sustainable growthHow to calculate customer lifetime value and customer acquisition cost, measure retention and churn, compare repeat and referral businesses, and grow customer value through the loyalty ladder.
- 12Customers are more than revenue: weighing relationship value in investment decisionsThe biggest customer is not always the most valuable relationship. How to weigh profit, volume, stability, learning, referrals and access when deciding which customer work to invest in.
These topic-based reading collections are organised alphabetically; chapters may be read in any order.
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