Disasters happen. Plan ahead. You would be surprised to learn how many “worst case” scenarios I receive that are nothing more than a best-case scenario with slightly lower revenue projections. Did we learn nothing from Covid-19? From supply chain disorder? From...
Entrepreneurial optimism. Working on your seed fundraising pitch? Want to really get the investors’ attention? Start with a flashy video. Spend a great deal of airtime describing how you developed your invention, its “origin story.” Concentrate on the huge,...
My last blog described the importance of EBITDA as both a profitability metric and as a tool for estimating the value of a company. EBIT, its close cousin, is simply EBITDA minus depreciation and amortization expenses. It is also a crucial profitability measure but,...
In my last blog I discussed Contribution Margin: Company revenues minus variable expenses. It’s the money left over to pay operating expenses. Once those operating expenses are deducted, what remains is Earnings before Interest, Taxes, Depreciation and Amortization...
As my previous blog suggested, gross margin is a critical profitability metric. Yet, it should not be looked at in isolation. A 50% gross margin on an ecommerce product may seem adequate, but it is only part of the picture. What if your selling expenses are high? You...
The importance of gross profits cannot be overstated. If you’re contemplating a fundraising round or an exit event, then it’s a benchmark metric right up there with ARR (annual recurring revenue), Sales & Marketing Expense/Revenues, and EBIT. Investors want to...
