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The Discounting Impact Calculator

Understand the Effect of Discounting on your Profits

 

Joe is unhappy with his business. He hopes that by discounting his prices he can increase his sales and improve his bottom line. What guidelines does he have to help him decide whether or not it is a good strategy?

The calculator below gives some clues.  The discounting calculator is a fantastic tool to help you can an appreciation of how discounting will impact upon your business.  You enter the key financial data from your profit and loss statement (Sales, Gross Profit, Expenses) and then make a decision about the discount you would like to try. 

The model will then calculate your summarised profit and loss statement before and after discounting.  The it will display a mini report based on your input that will tell you among other things what level you need to increase your sales by in order to hold your current level of net profit.

There is a complementary calculator that will explain to you the mathematics of doubling your profitability.  If you are new to business you should visit how to start a business.

 

The Effect of Discounting