Exploring Product Margins: An In-Depth Examination of how 3 Different Margins Impact Your Need to Take on Debt
You’ve probably heard The Good Food CFO say “50% is not good for your food business!” Well today, we’re diving into what that really means. In this episode, Sarah walks Chelsea through the nuances of profit margin, specifically challenging...
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Show Notes
You’ve probably heard The Good Food CFO say “50% is not good for your food business!”
Well today, we’re diving into what that really means.
In this episode, Sarah walks Chelsea through the nuances of profit margin, specifically challenging the commonly accepted 50% target in the food industry. She shows that this one-size-fits-all approach doesn't suit every business and can lead to cash flow struggles and increased reliance on debt.
We look at some examples, and demonstrate how 3 different margins affect financial stability, and emphasize the importance of founders setting their own financial comfort levels and understanding the implications of their margin choices. We also share our tools and resources that will help business owners make informed decisions about pricing and growth strategies.
You’ll hear:
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The importance of being in control of your finances and making informed decisions about your business
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Why Sarah picks on 50% product margins
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How a 40%, 50% and 60% margin can dramatically impact your need to take on more debt in order to grow your business
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The things you should consider about running your business at each of these margins
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And more!
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