Costing and pricing is a key issue in tendering and quoting for work and it must be correct and commercially attractive. A common problem with how to calculate markup price is getting simple mathematics wrong.
When pricing a tender or quote people start with quantities and costs for labour and materials. A markup is added to the cost. e.g. for a cost base of $2,000 add 20% – equals a sell price of $2,400.
It seems like everything is available in a ‘virtual’ version these days. There’s virtual conferencing, furniture staging, assistance and even virtual life games! The internet and increased broadband capacity has made this all possible.
We now don’t have to just accept what’s available in our local area, we can access the very best quality from anywhere in the world. Obviously there are some drawbacks to dealing with services from overseas such as different culture, language and time zones etc.
How SMEs are saving and making more money every day with CFO On Call
The team at CFO On Call are a bunch of brilliant, logical, commercially experienced people, who are constantly helping SMEs improve profit and cash flow. Here are just some of the ways they have done this recently:
My client in the manufacturing industry assumed their ‘scrap’ to be 8% of raw materials, but this had never been measured. I introduced two 13-week programs where ‘scrap’ was measured and transferred to their accounting system. We discovered that their ‘scrap’ was actually running at 12%. Prices were increased to reflect the extra percentage involved in ‘scrap’
The right advice and the right action at the right time can make a world of difference to the success of a business. All businesses experience ups and downs. Knowing whether to persevere through the storm or to cut your losses and exit before things get worse can be difficult, particularly in the case of a family business. Emotional attachment, fear of failure, family pressure and expectation and personal liability which risks the family home are all factors that can make it difficult to make an objective decision. Seeking independent, professional business cash flow forecasting advice at the right time can help guide you through the storm or work out a plan to achieve the best result should it be time to call it quits.
Need help to boost your cashflow or profit?
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