Volume 1, Issue 11 - July 2017 Greetings Business Owner, It's the start of summer for parents of young children. School is out and camps and other s

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Volume 1, Issue 11 - July 2017


Greetings Business Owner,

It's the start of summer for parents of young children. School is out and camps and other summer activities begin. Be safe and enjoy the season, as it goes by so quickly.

You can unsubscribe at any time by clicking on the link at the bottom of the page. Feel free to forward to anyone who may be interested or check out my website for more details about Kipp's Books.

Have a great day,
Ali :)

Optimize Your Revenue Mix for More Profits

Many small business owners focus on generating more revenue every year, and that’s a great objective. But not all revenue is created equally. If you sell more than one product or service in your business, you can benefit from looking at your revenue mix.

Although it’s fun to watch our revenues grow, what really matters is the profit number. If your expenses grow faster than your profits, you have a lot of activity going on, but you don’t get to keep as much of what you make. This is what really matters.

An insightful exercise to try is to take a look at your revenue mix. Then you can ask “what if?” to optimize your profits.

Your Revenue Mix

Let’s say you offer three different services: Services X, Y, and Z. Your revenue pie looks like this:

X: $1.4 million or 70% of the total
Y: $0.3 million or 15% of the total
Z: $0.3 million or 15% of the total
Total: $2.0 million

In this example, Service X is clearly the service making you the most revenue in your business. But is it making you the most profits?

The profit you receive from each of these service lines is as follows:

X: $160K
Y: $20K loss
Z: $60K
Total: $200K

While Service X is generating the most profit volume for your business, it’s actually Service Z that’s the most profitable. Earning $160K on $1.4 million yields 11.4% return on Service X, but earning $60K on $300K yields nearly double the return at 20%. Service Z generates the most return. And if possible, Service Y may need to be discontinued or turned around.

Optimizing Profits

Your strategy for a more optimum revenue mix might be to sell as much of Service Z as possible, while eliminating or fixing the problem around Service Y.

It’s fun to experiment with different revenue mixes. And of course, there are many more variables besides profit, such as:

Which service do you prefer to work on?
Are you able to sell more of the most profitable service or are there marketing limitations?
Is one service a loss leader for the others?
Are you able to adjust price on the lower margin services to increase your profits?

There are many more questions to ask and strategies to consider to make you more money, which is why we love our job!

A New Mix

I hope you’ll spend time analyzing your revenue mix and having fun asking yourself “what if?” If I can help expedite the process or add our perspective, please reach out anytime.


What does your revenue mix look like? Visit Kipp's Books website or call 201.739.4479 if you need help with bookkeeping.

Kipps Bees

Check out my Blog here. and pass the information to anyone you feel will benefit from bookkeeping knowledge. Referrals are a strong part of my business and very much appreciated.

Thank you for your support,
Ali :)


Alison K.M. Lohr is...
Certified Public Bookkeeper
QuickBooks Online Pro Advisor
Treasurer for the Jefferson Twp Chamber of Commerce
Member of the National Association of Certified Public Bookkeepers (NACPB)

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