Small businesses need to make a profit in order to produce positive cash flow. Without profit, your business is just a hobby!

But how much profit is enough to run your small business? What should we be shooting for when it comes to an ideal profit margin?

This video gives specific targets for servicebased small business owners.

0:00 Labor efficiency ratio
0:19 What should your profit % be?
1:04 Profit percentage minimum
1:35 Profit percentage calculation
1:50 Why 15% minimum?
2:30 Hobby or business?
3:50 New breakeven
4:12 Argument for 20%
4:50 LER and profit margin
6:35 Profit tolerance
7:05 Improve profit margin
8:08 Share your numbers

Mentioned in this video:
Interview with Greg Crabtree:    • Interview with Simple Numbers Straigh...  
Podcast with Greg Crabtree:    • Keeping It Simple With Greg Crabtree  
Simple Numbers Book: https://www.claracfo.com/simplenumbers

To learn more about CFO services for B2B services providers making over $1M in annual revenue, go to: https://claracfo.com/cfoservices/'>https://claracfo.com/cfoservices/

Need an accounting system? We use Quickbooks Online with clients and recommend it as the best accounting system for small businesses. Sign up to get a discounted subscription for 12 months! https://claracfo.com/QBO'>https://claracfo.com/QBO

‍♀‍Got Employees? Talk to ADP! They can help you if you are a small business owner or an accountant or advisor who works with small businesses. Learn more here: https://claracfo.com/adprun'>https://claracfo.com/adprun

Pay vendors any way they want and get paid faster! Accept credit cards without paying merchant fees! Melio is a fantastic payments solution for every small business! https://claracfo.com/melio'>https://claracfo.com/melio

(As an affiliate or referral partner for these companies, I may earn rewards from qualifying purchases)

Hannah Smolinski is a #CPA and the Founder of Clara CFO Group. Find out more about Clara CFO Group at https://claracfo.com/

Disclaimer: This video is intended for educational purposes and should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Clara CFO Group, LLC is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience.

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