Discount Pricing? - Be Careful!

Business Owners - Here’s what I see happen too often:

Some start discounting to win deals, then wonder why cash feels tight even when revenue is up.

It’s usually a margin trap, not a “sales problem.”

Run this 5-question pricing math review before you approve the next discount:

1) What is my contribution margin after direct costs?

2) What happens to margin if volume drops 10 percent?

3) How much of the discount is offset by faster collections or lower costs?

4) What is the minimum margin floor per product or service line?

5) If this deal sets a precedent, what will it do to future pricing?

Picture this:

A $10,000 deal gets 10 percent off. If direct costs are $7,200, your contribution margin goes from $2,800 to $1,800. That $1,000 difference can wipe out the cash you thought you were “saving” elsewhere!

***Your bookkeeper records history. Your Fractional CFO builds your future. Start with a margin analysis by offer, not just total revenue.***