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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