Tag Archives: cost analysis

I spend a lot of time thinking about the balance between cultivating customers and customer profitability – both for my own business, and for my clients. For every type of B-to-B business – whether you sell products or services – … Continue reading

Posted in analysis, financial management, general business, Measurement, strategy | Tagged , , , , | Leave a comment

Where costs + branding effort = margins The zeitgeist issue of the week is pricing strategy, and how to price products for acceptance in the market. This is an issue all my clients confront. For software clients, pricing strategy differs … Continue reading

Posted in economics, general business, merchandising and marketing, pricing, strategy | Tagged , , , , , , , , | Leave a comment

Margin is typically viewed within its accounting framework, but the rules of business are changing and business owners must expand their understanding of how to increase margin if they want to remain competitive and profitable. This video tells you how. Continue reading

Posted in branding, entrepreneurship, general business, production, strategy | Tagged , , , , , , , , | 1 Comment

Understanding and managing product costs is one of the most challenging – and critical – responsibilities of small manufacturing business owners. This article offers common sense, achievable advice for taking control of costs and profitability. Continue reading

Posted in financial management, production, supply chain | Tagged , , , , , | Leave a comment

All business owners must differentiate or compete on price, but the stakes are much higher for designer businesses. Differentiation on design is the primary argument for maintaining higher prices, and failure to do so undermines the entire business premise. Do you know which questions to ask when establishing your pricing strategy? Continue reading

Posted in economics, entrepreneurship, merchandising and marketing, strategy | Tagged , , , , , , , , | Leave a comment

The biggest danger to a business owner is lack of originality – generally demonstrated by virtue of getting trapped in his or her industry’s trends. Industry trend following simply turns your business into a commodity business. Avoid the trap, and maintain your margins. Continue reading

Posted in entrepreneurship, general business, merchandising and marketing, strategy | Tagged , , , , , , , , | 3 Comments

I invite you to ponder two thoughts over the weekend. I’d like you to think about the effects of fear, and the benefits of action. Continue reading

Posted in economics, general business, personal development | Tagged , , , , , | Leave a comment

Supply Chain Management represents the best opportunity to maintain your footing in a difficult economy. Buyers have particular responsibility related to high volume/high profit potential products. If any product is responsible for a significant percentage of the firm or division’s profitability, it is not enough to make sure the product or its components arrive on time and are of acceptable quality. It is also important to understand the manufacturing process related to that product, the market conditions affecting the components of that product, and the vendor’s ability to manage those manufacturing and market conditions.

Beyond those obvious high-focus products, where is the next best place for a buyer to focus their attention? On products where the labor cost is a high percentage of total cost. Why is this so important? Because your opportunities to work on productivity improvements with vendors are very high on these products. Continue reading

Posted in supply chain | Tagged , , , , , , , | 1 Comment

Though cost-based accounting methods can be credited with advancing organizational ability to dissect operating processes and analyze where change might be most beneficial, cost accounting also has a downside. The very process of apportioning costs applies component-based to thinking to system-wide problems. Does this mean that cost allocations are bad and should not be done? Definitely not! (though I have discovered that this topic has a strange knack for bringing out the argumentative extremist in far too many businessmen). The solution is to recognize that component-based thinking creates a certain type of bias, and that bias can be offset by approaching the same problem (or, ideally, set of problems) with system-based thinking. Here’s an example of an actual problem Continue reading

Posted in management and leadership | Tagged , , , , , | 1 Comment

Your overall pricing strategy is secondary to your company’s strategy and value proposition. “Lowest price always” is a valid strategy, but it has to be applicable across the board, and not just on a product or two. It is also heavily dependent on volume, which is why you have to be the size of Wal-Mart or Amazon to successfully deploy that strategy. Other value propositions are customer intimacy, leading product/technology, and system lock-in. Continue reading

Posted in general business, merchandising and marketing, pricing | Tagged , , , , | 3 Comments