Profit: operating expenses budget off spendable revenue
Revenue: discount effect on profit
results summary–
C • Cash
How many months your cash will last
ⓘ
Runway = how long your cash lasts if nothing changes.
Formula: cash ÷ average monthly net outflow (after customer collections).
—
Runway = cash ÷ average monthly net outflow (after customer collections).
P • Profit
Operating expenses budget = % of Spendable Revenue
ⓘ
Spendable Revenue (SR) = Revenue − Direct costs (materials, labor, subcontractor).
Your monthly operating expenses budget is a chosen % of SR.
Budgeting off Sales (instead of SR) over-allows spending.
Pick a % (e.g., 30%) that fits your model and stick to it.
—
Spendable Revenue (SR) = Revenue − Direct costs (materials, labor, subcontractor). Your monthly operating expenses budget is a chosen % of SR.
R • Revenue
Discount effect — extra sales needed to keep profit the same
ⓘ
Required sales lift = m/(m−d) − 1
It’s the % extra sales needed after a discount so profit dollars don’t fall.
(m = current margin before fixed costs, d = discount)
—
Required sales lift = m/(m−d) − 1 — the % extra sales needed after a discount so profit dollars don’t fall (m = current margin, d = discount).
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Run the 3 checks below, then lock your weekly ritual.
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Cash: months your cash will last
Profit: operating expenses budget off spendable revenue
Revenue: discount effect on profit
results summary–
C • Cash
How many months your cash will last
ⓘ
Runway = how long your cash lasts if nothing changes.
Formula: cash ÷ average monthly net outflow (after customer collections).
—
Runway = cash ÷ average monthly net outflow (after customer collections).
P • Profit
Operating expenses budget = % of Spendable Revenue
ⓘ
Spendable Revenue (SR) = Revenue − Direct costs (materials, labor, subcontractor).
Your monthly operating expenses budget is a chosen % of SR.
Budgeting off Sales (instead of SR) over-allows spending.
Pick a % (e.g., 30%) that fits your model and stick to it.
—
Spendable Revenue (SR) = Revenue − Direct costs (materials, labor, subcontractor). Your monthly operating expenses budget is a chosen % of SR.
R • Revenue
Discount effect — extra sales needed to keep profit the same
ⓘ
Required sales lift = m/(m−d) − 1
It’s the % extra sales needed after a discount so profit dollars don’t fall.
(m = current margin before fixed costs, d = discount)
—
Required sales lift = m/(m−d) − 1 — the % extra sales needed after a discount so profit dollars don’t fall (m = current margin, d = discount).
Profit: operating expenses budget off spendable revenue
Revenue: discount effect on profit
results summary–
C • Cash
How many months your cash will last
ⓘ
Runway = how long your cash lasts if nothing changes.
Formula: cash ÷ average monthly net outflow (after customer collections).
—
Runway = cash ÷ average monthly net outflow (after customer collections).
P • Profit
Operating expenses budget = % of Spendable Revenue
ⓘ
Spendable Revenue (SR) = Revenue − Direct costs (materials, labor, subcontractor).
Your monthly operating expenses budget is a chosen % of SR.
Budgeting off Sales (instead of SR) over-allows spending.
Pick a % (e.g., 30%) that fits your model and stick to it.
—
Spendable Revenue (SR) = Revenue − Direct costs (materials, labor, subcontractor). Your monthly operating expenses budget is a chosen % of SR.
R • Revenue
Discount effect — extra sales needed to keep profit the same
ⓘ
Required sales lift = m/(m−d) − 1
It’s the % extra sales needed after a discount so profit dollars don’t fall.
(m = current margin before fixed costs, d = discount)
—
Required sales lift = m/(m−d) − 1 — the % extra sales needed after a discount so profit dollars don’t fall (m = current margin, d = discount).