Jacksonville CPA | Showing You What We Know

Hello and welcome to today’s podcast. My name’s Brandon Mcelroy and I’m the president of Mineva at Jackson will base tax and accounting firm. And today I want to talk about the importance of properly pricing your products and services and how price directly reflects your financial success.

So many people will price their services based on what they think the market will bear or they’ll price their services based on, you know, a business that is in the same industry as them maybe in a different location with different costs. And one thing I’ll say on price is that there’s so many different factors that go into pricing your products. If you’re a Jacksonville CPA is not helping you with this, then give them a call and we’ll put together a solid plan for you to properly price your products and services. So for instance, you may have a mechanic shop that is charging an hourly rate for it services and the labor and your area is much more than the labor and maybe another city, another area. So knowing your numbers, knowing your cost numbers as directly going to reflect what you should be pricing out.

And for instance, if you, if you’re hiring a mechanic and you need to know what to do, how much to pay them, or can you give them a race, then you need to make sure you factor that in to the pricing of the product. And if your Jacksonville CPA is not helping them with this that you need to give a call. So let’s take for instance, you need, you have a piece of property

that you want to purchase, a business piece of property you want to purchase that will allow you to do 10 more trucks a week based on the additional bays and a storage facility that you have at that piece of property. Well, you need to sit down and run the numbers and find your break even point. Everything starts with finding your break even point. So how do you find your break even point for Jacksonville? CPA is not helping with this. Then you need to give them an Eva Cole, okay? What? What is your current break even point? Find Your breakeven point. Do you need to find all of your monthly expenses

and you need to tabulate them. Summarize him all the fixed expenses and everything that you have to pay to keep the lights on your employees, your rent, your mortgage, electricity, whatever it may be, and and then you go from there. You have that number. Then let’s say for instance, you are that decent mechanic shop that I talked about. You have your expenses $100,000, so you know that need to generate at least a hundred thousand dollars in revenue to cover these additional expenses. I’m sorry, to cover these fixed expenses. If you’re Jacksonville CPA is not communicating this to you, then give them a call and we’ll help you out.

So you have your variable expenses, which will be in shop example, the cost of parts, right? So the more jobs you do, the more parts you’re going to have to buy. So your variable expenses will increase, the more work you have. So, but you need to do is find out how much of your variable expenses are per profit dollar portrait per revenue dollar. So if your revenue increases a dollar, how much are your variable expenses? Okay, let’s just say your variable expenses are thirty cents on the dollar for example, so to generate a dollar I’m going to have to pay thirty cents and parts. Okay? Just for example. So then that gives you the ability to properly price your parks, your Jacksonville CPA, not happy with this. Then you need to give them an I have a call and you maybe paying your mechanic $20 an hour, but if you’re only charging $50 an hour to the customer, then you’re barely covering the cost of the employee. So you’re, you’re eating while your profit. So you need to make sure that the price you charge the customer reflects your costs, fixed costs, your variable cost plus your profit. Okay? So if you’re Jacksonville CPA is not helping with this, then a call and then you need to set up a monitoring plan to make sure that you’re monitoring on a regular basis. All of the items that we’re talking about.

So it’s very important that you find out what costs. And this is very important to someone especially who’s performing jobs, big jobs like a construction company or plumbing, electrical company. Jacksonville CPA is not helping them figure this out, so you know, they customer wants this dike, they quote a price at the very beginning when the customer comes up and says, okay, I need this, this, this, this, and they’re not keeping track of everything that’s going against those jobs. So they come to turn around and they find out that, uh, they’re losing money on their jobs, right? Which is just unacceptable. Okay, you’re in business to make money. So have you enjoyed today’s podcast? If you’re Jacksonville CPA is not exceeding your expectations, please give them a phone call so we can help you form a solid financial plan.