Jasz
VIP Contributor
Profit planning and pricing in business is an essential part of running a business.
Planning your Profit and Pricing
The first step in profit planning is to calculate your total profits. The formula for this is:
Your total sales - Your total costs = Your Total Profits
You can then take this figure, and divide it by the number of months in the revenue period (usually 3 or 4). This will give you an average monthly profit per month. From here, you can decide how much money you want to make per month, which will determine your price point for each product or service.
These are also the basic financial statements that should be prepared for a company's financial control and planning purposes.
It is important to keep in mind that these statements are not intended to make a profit. They are just an indication of how much money a company has generated, how much money it can generate, and what its future prospects are.
Planning your Profit and Pricing
The first step in profit planning is to calculate your total profits. The formula for this is:
Your total sales - Your total costs = Your Total Profits
You can then take this figure, and divide it by the number of months in the revenue period (usually 3 or 4). This will give you an average monthly profit per month. From here, you can decide how much money you want to make per month, which will determine your price point for each product or service.
These are also the basic financial statements that should be prepared for a company's financial control and planning purposes.
It is important to keep in mind that these statements are not intended to make a profit. They are just an indication of how much money a company has generated, how much money it can generate, and what its future prospects are.
