The importance of having a healthy profit margin and how

joly5555

Why do most small businesses go out of business in less than a year? The profit margin is directly related to this fact. NO TIME TO READ? DOWNLOAD THE FREE PDF NOW Name Email Among the research carried out by SEBRAE, there is one that analyzed the reasons for the closure of projects. Data shows that 7% of these companies close due to lack of profit. 20% close the business due to lack of capital. And almost 50% of small business owners in Brazil do not know whether they are making a profit or a loss. Does your company know? This is the result of a lack of adequate management that can handle resources in favor of financial growth. Now let's move on to the analysis over the years based on data from the Brazilian Institute of Geography and Statistics (IBGE). There were 341.6 thousand companies closed in three years. Of the total number of companies closed between 2013 and 2016, 76.8% were focused on commerce. In the same period, the market lost 3.7 million jobs and salaries shrank 0.7%. Therefore, it is essential to know that small businesses cannot be managed informally, they must have complete and effective management. You know the competition is big and you want to get ahead. So learn more about how to maintain the financial health of your business from now on. What is profit margin? How to calculate your company's profit margin? Find out how important this calculation is for any business Is there an ideal profit margin for your company? What is profit margin? Everyone knows that the profit margin has the function of generating profits for your business. But it is important to emphasize that it optimizes the sales of products or services in any segment by calculating the necessary costs and adding these costs when forming the final sales price.

The success of companies largely depends on the profit Colombia Mobile Number List margin as it is what covers their expenses, the money that goes out for investment and crises too. In short, its calculation is made based on what the market is willing to pay, subtracting all costs to produce and deliver, taking into account taxes and thus arriving at the value received by the entrepreneur. Stay tuned! Arbitrary profit margins are often established by the company itself. What is that? The price of products and services are calculated according to what the company wants to earn and not adapted to the market. Therefore, the merchandise is priced above the market, reducing the quantity of sales. As each sector has a different profit margin, analyze your segment and type of business. This way, the definition of the price to be charged will be more assertive. How to calculate your company's profit margin? There are three divisions within the profit margin that are important to understand. Cost. Amounts necessary for the production or purchase of raw materials to prepare what will be offered.



Taxes, shipping and other financial expenses are included. Sales Prices. It is part of the process of marketing a product and defines a fair price for the product or service. Profit. Return in percentage received upon the sale of a product.  importance of having a healthy profit margin goes beyond the company's great maintenance needs, but also in terms of where you want to achieve. An entrepreneur thinking about expanding and growing their business with capital to sustain the organization for the coming decades will have to consider the size of the profit margin from higher levels. Furthermore, the market is a machine for creating surprises as there are several factors that directly influence it, politics, the economy, crises, among others. Those who pay attention to the profit margin are more likely to be assured of any unexpected changes, thus creating a high power of adaptation. Is there an ideal profit margin for your company? This is a very common question. However, the answer is negative. As there are many factors and differences, it depends a lot on the situations. There are those who say that it is recommended that the profit margin be at least 20%, but this rate is not always achievable. try.