Pricing and Profitability Review

What it is

The Pricing and Profitability Review shows which of your products, services, jobs and customers really make you money once every cost is counted, and which ones quietly lose it. You get a recommended price for each line and the extra profit each change would bring, so your next price rise is based on evidence, not a guess.

How we do it

We take your sales, costs and payroll and work out the true cost of each product, service line, job type and major customer, including a fair share of wages, overheads and the time things really take.

We compare that cost with what you charge, which shows clearly what makes money, what only breaks even and what loses it.

We then recommend a price for each line, show how much extra profit each change would bring, and meet with you to agree which changes to make and when.

Is this for you?

Clients usually call us for this when:

• Sales are up, but profit isn't.
• You haven't reviewed your prices in a year or more.
• Some jobs or customers feel like hard work for very little return.
• Your costs have gone up faster than your prices.
• You are planning a price rise and want to get it right.

What you receive, and what each gives you

• Profitability model, unlocked: the true cost and margin of each product, service line, job type and major customerA spreadsheet showing the true cost and profit of each product, service, job type and major customer, fully open so you can see how every number was worked out.
• Winners and losers list: what makes money, what breaks even and what loses itA clear list of what makes money, what only breaks even and what loses money, so you know where to focus.
• Recommended prices for each line, with the profit effect of each changeA recommended price for each line, with the extra profit each change would bring, so you can decide with the numbers in front of you.
• Findings report, 8 to 12 pages, with a one-page summaryA short report of 8 to 12 pages, starting with a one-page summary you can read in five minutes.
• One 60-minute session with the owners to agree the price changesA 60-minute session with the owners to agree which price changes to make and when.

What changes for you

• Prices set on evidence, not habit or guesswork.
• More profit from the same amount of work.
• Less time spent on jobs, products and customers that don't pay.
• Confidence when you tell customers about a price change, because you know why it is needed.

The questions it answers

• Which of our products, jobs and customers actually make money?
• Are we charging enough, and where are we underpriced?
• What would a price change add to our profit?

Words we use, explained

Margin

The share of each sale left as profit after the costs of making that sale.

True cost

Everything it takes to deliver a product or job, including wages, materials, time and a fair share of overheads such as rent and vehicles.

What we’ll need from you

A one-page checklist comes with the engagement letter, with a private page to upload everything. The main items:

• Profit and loss for the last 2 financial years and the current year to date
• Sales by product, service line or job type for the last 12 months (an export from the accounting or job system is fine)
• Sales by customer for the last 12 months
• Direct costs by product or job where tracked (materials, subcontractors, freight)
• Payroll summary showing each role, hours and total cost (names not needed)
• Current price list, rate card or quoting template
• The date and size of your last price change

Not included

• Market research or collecting competitors' prices (we use what you know about the market).
• Changing prices in your systems or telling customers about them.
• Tax advice, bookkeeping or an audit.
• The profit figures are estimates based on your own numbers, not forecasts.

The technical detail

The true cost of each product, service line, job type and major customer, including wages, time and a fair share of overheads, compared with what you charge. Recommended prices for each line with the profit effect of each change, and a 60-minute session to agree the changes.

Often paired with

Connected Reporting: Connected Reporting shows your margins every month straight from your accounts, so you can see the new prices working and spot any slippage early.

Business Operating Review: If pricing is only part of the story, the Business Operating Review looks at the whole business (cash, capacity, customers and costs) and ranks the three changes worth most.

Common questions