Ever feel like your costs keep showing up without warning? You’re not alone. For small business owners, understanding the difference between fixed and variable costs isn’t just Accounting 101 — it’s essential to making smarter decisions. From pricing and profit forecasting to break-even analysis, this one concept shapes nearly everything. Let’s break it down simply…
Running a small business means every dollar counts — and knowing exactly where those dollars go can be a game-changer. That’s where Activity-Based Costing (ABC) comes in. Don’t let the name scare you off. It’s not just for big corporations with accounting departments. ABC is actually a smart, practical way for small businesses to understand…
Not all sales are good sales.Just because something is selling doesn’t mean it’s serving your business. One of the trickiest calls a founder has to make is whether to keep offering a product or service that just doesn’t pull its financial weight. If your margins are razor-thin, it may be time to step back and…
You may have bestsellers flying off the shelves — but are they actually making you money? Many business owners focus on sales volume or revenue, but overlook the real star of the show: product-level profitability. If you’re not analyzing profit per product, you might be unknowingly scaling loss-makers. Let’s fix that. What Is Product Profitability?…
Pricing services isn’t as simple as slapping a number on your offer and hoping it sticks. Underprice it — and you’re burning out for peanuts. Overprice it — and you risk scaring clients away. The goal? Strategic pricing that maximizes profit without compromising value. Why Pricing Services Is Tricky Unlike products, services are intangible, often…
Service-based businesses live and die by how well they manage time, people, and overhead. But one of the trickiest parts? Figuring out where your costs actually belong. If you’re not allocating costs properly, you may be overpricing some services, underpricing others, and misreading your profitability altogether. What Is Cost Allocation? Cost allocation is the process…
You’re landing new clients, sales are up, and on the surface — business seems great.But the bank balance says otherwise. If your profits aren’t where they should be, the problem might not be your top line. It could be hidden costs silently draining your bottom line. What Are “Hidden Costs”? Hidden costs are expenses that…
How do you know if your business is doing “well”… or just getting by? It’s one thing to hit your internal goals — but quite another to know how you stack up against others in your industry. That’s where benchmarking comes in. What Is Benchmarking? Benchmarking is the practice of comparing your business’s performance metrics…
Ever set a budget… and then wonder where things went off the rails? Variance analysis is how you stop wondering. It helps you figure out why actual results differ from what you expected — and what to do about it. Whether your business is growing, stable, or struggling, variance analysis gives you the insight to…
Most financial problems don’t happen overnight. They build quietly over time—sales dip a little, expenses creep up, cash flow thins out. The good news? If you’re watching your trends, you can spot those warning signs early. Trend analysis isn’t just a tool for analysts or accountants—it’s a smart way for business owners to understand the…