05B. Profitability KPIs: Cost of Goods Margin

Episode 5 of Building Your Multi-Million Dollar Practice focuses on digging into KPIs that measure Profitability and how they impact your clients and your advisory services. We already went over a few of these, so now we’re going to focus on Revenue Per Employee, Cost of Goods Margin, Expense Margin, Net Worth, and Gross Margin. Cost of Goods Margin measures what percentage of revenue will go to cover the cost of goods sold within a business. This calculation can be dependent on how the chart of accounts is structured and should take commissions and other factors into account. This impacts your advisory services because it is important to be able to determine what the actual cost is for a sale. The Formula: -1 * ( Cost of Sales / Income )