ABCDEFGHIJKLMNOPQRSTUVWXYZ
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Enter Data only in cells with BLUE text!
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Increase Prices by
Lose Clients
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10%Percent16%Percent
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Current
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Annual Sales \$\$500,000\$550,000\$462,000
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Annual Payroll Cost
\$250,00050.0%\$250,00045.5%\$210,00050.0%
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All other Costs\$200,00040.0%\$200,00036.4%\$200,00043.3%
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Total Costs\$450,00090.0%\$450,00081.8%\$410,00088.7%
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Net Profit\$50,00010.0%\$100,00018.2%\$52,00011.3%
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In this example you can see that if you increase prices by 10% and lose 16% of your customers (trimming payroll by a similar amount) you end up earning the MORE MONEY doing less work!
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Now it's your turn. Make a copy of this spreadsheet for yourself (either "add to My Drive" if you are a Google user, or File > Download as > Microsoft Excel if you are a MS user) and enter your company's info into this spreadsheet. Use last 12 month's data for "Current". Then set assumptions for a price increase and what percentage of clients you think you'd lose. Play with the numbers until you are happy with it!
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