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How much is that one additional unit worth?

Berkonomics

Most college econ courses teach marginal economics. Every dollar of gross profit falls to the bottom line, increasing net profit faster with each transaction. Just to be fair, a 5% cut in costs would also double net profit. Getting to breakeven, allows us to at least double our net profit with the next unit sold.

.Net 156
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A Startup’s Net Profit Score Is More Important Than Its Net Promoter Score

InfoChachkie

As crazy as this scenario sounds, it is very similar to the “scoring process” companies engage in when they track Net Promoter Scores. Net Promoter Scores (NPS) are the darling of many Big Dumb Company (BDC) product marketing and customer support executives. A Net Promoter Score of 10 and a bank account of 0 equal a failed venture.

.Net 182
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A Startup’s Net Profit Score Is More Important Than Its Net Promoter Score

InfoChachkie

As crazy as this scenario sounds, it is very similar to the “scoring process” companies engage in when they track Net Promoter Scores. Net Promoter Scores (NPS) are the darling of many Big Dumb Company (BDC) product marketing and customer support executives. A Net Promoter Score of 10 and a bank account of 0 equal a failed venture.

.Net 168
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I sat in my own safety net while weaving it.

Berkonomics

Of course it wasn’t just one event that was the cause, as you might guess. Or as one of the richest guys in the world is quoted as saying, “A real entrepreneur is somebody who has no safety net underneath him.”. The problem is that we weave that safety net even as we sit in it, making the job doubly difficult.

.Net 120
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A heartbreaking story about time and money.

Berkonomics

Although young companies rarely measure profitability this repeatedly, more mature companies usually can bring from five to ten percent of revenues to the bottom line in the form of net profit. It did not take long for the partner to become impatient with the relatively small size of the opportunity.

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An economics lesson for growing companies

Berkonomics

Email readers, continue here… ] The banks want to maintain their venture relationships and of course, want to use the existing company cash in their bank as collateral for – you guessed it – their loans to the company. Ironically, the term is “compensating balances”. Read the loan covenants carefully.

Company 156
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Does your company have a “dirty cap table?”

Berkonomics

Currently that standard requires a minimum of $200,000 in annual income or over one million in net assets, including the value of the investor’s principal residence. What if some past investors don’t meet that standard? It is worth checking with an attorney to see if such investors are truly exempt. Does issuing a PPM insulate the company?

Company 156