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How’s Your Sales Plan Working? Calculating Profitability!

We are well into the second half of the calendar year, and to ensure a profitable end to your year, take a few minutes to look at what is in your pipeline, what has been onboarded, and what is in production. Is it what you expect? Pat McGrew offers some tips for evaluating your YTD performance.

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About Pat McGrew

Pat is a well-known evangelist for inkjet productivity. At McGrew Group, she uses her decades technical and marketing experience to lead the industry toward optimized business processes and production workflows. She has helped companies to define their five-year plans, audited workflow processes, and developed sales team interventions and education programs. Pat is the Co-Author of 8 industry books, editor of A Guide to the Electronic Document Body of Knowledge, and a regular contributor to Inkjet Insight and WhatTheyThink.com.

Discussion

By Robert Lindgren on Jul 19, 2022

"Margin" which usually means the difference between the invoice and the fully allocated cost of a job including allocations of overhead is really useless and misleading. The key number is "contribution" the difference between the invoice and the amount actually spent to produce it (materials, buy-outs, factory direct wages and sales commission). When the total contribution in any time period exceeds the overhead the printer is in profit land.

The key to maximizing contribution is to charge as much as the customer will pay but also get the order. This strategy will maximize the dollars of contribution, not its percentage, but it's the dollars that count.

The average contribution of a printing job is around 40%. In some situations the value and importance of the work can produce a 50% or 60% contribution and in others perhaps only a 20% or 30% one is available, but it's the total that counts. Both situations are central to achieving that.

 

By Pat McGrew on Jul 19, 2022

As always, thanks for your comment! Your second paragraph says it all and is where many of the people we work with miss the calculus. Thanks for the laser focus!

 

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