SM1.1 Rapid Profit Increase from Price Increase

As was outlined in the introduction to our Pricing Module, the extra profit from even small changes in the prices of your product goes 100% to your bottom line Profit (assuming demand doesn’t change).  Consider a business turning over $500,000 per year. Let us further assume that it makes a 5% profit on that, which gives it a Profit of $25,000.  If it increased its price by 1%, and assuming demand remained constant, that would lead to an extra $5,000 in Income. This extra $5,000 profit, over the original $25,000 profit, is an 11% improvement.  In keeping with our 80/20 philosophy this article discusses a rapid change to your pricing system that can flow virtually 100% to your bottom line Profit. It is a rapid, and not very subtle, change that you can later adapt to make it more focused and more successful.  This is a yellow belt article

SM1.2 Longer Term Pricing Systems

Price is a major determinant of the profitability of your business!  A Price change of as little as 1% can often lead to profit increases of up to 11%.  You can make quick changes by changing your existing pricing by a percentage figure that, essentially, you think you can get away with.  However, in the longer term, you might want to develop a system to your pricing so that you get a method of getting the best prices you can.  Price is one of the major determinates of Revenue so it is an important issue to be aware of.  This is a blue belt topic.

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