margin-analyzer

Margin Analyzer — Margin Analyst

"Analyse margins."

Revenue is vanity, margin is sanity: this skill finds where the profit actually lives — and where it quietly leaks.

When to use

• "Revenue is up 20% but the bank account isn't — where does the money go?"
• "Which products / services / clients actually make us money?"
• "Should we raise prices, and on what?"
• "A client is pushing for a discount — where's my floor?"
• Before adding a product line or killing one: run the mix first.

Workflow

1. Pick the unit and ingest data. Product, service line, or client — whichever the decision is about. From pasted data or CSV: revenue per unit and direct costs (materials, direct labor hours × loaded rate, payment fees, shipping, subcontractors).
2. Compute contribution margin with code. Revenue − direct costs, per unit; rank by CM%. Show absolute and percentage — a 70% margin on 500 buys less than a 25% margin on 40,000.
3. Allocate overhead and state the method. Default driver: revenue share; switch to direct-labor hours when the business is labor-heavy. Compute net margin per unit. The allocation choice changes the answer — say which was used and why.
4. Set price floors. Floor = direct cost ÷ (1 − target CM%). Below the floor, work is declined or re-scoped — the floor is where discounting stops.
5. Run the mix analysis. Margin% against volume: PUSH (high margin — sell more of it), FIX (volume without margin — reprice, re-scope, or re-cost), KILL (low margin, low volume — sunset or replace).
6. Model three pricing moves with code. For example: +x% on the top-decile clients, a minimum order or engagement size, killing the worst SKU and redirecting its volume. Quantify annual margin impact and name every assumption.
7. Pick the first move. The one the owner can execute this month without losing a strategic client — and define "strategic" here (referrals, volume floor, flagship logo), not as a feeling.

Output format

MARGIN ANALYSIS — <business> — <period> — unit: <product / service / client>

CONTRIBUTION MARGIN RANKING
Rank | Unit   | Revenue | Direct costs | CM     | CM% | Volume
1    | <name> | 38,000  | 14,400       | 23,600 | 62% | ...
...  | ...    | ...     | ...          | ...    | ... | ...

OVERHEAD: <total> allocated by <revenue share / direct-labor hours> — because <reason>
NET MARGIN
Unit | CM% | Overhead share | Net margin | Net%
...  | ... | ...            | ...        | ...

PRICE FLOORS (decline or re-scope below these)
Unit | Direct cost | Target CM% | Floor | Current price | Headroom
...  | ...         | ...        | ...   | ...           | ...

MIX
PUSH: <units> — <why, and the move that grows them>
FIX:  <units> — <reprice / re-scope / re-cost, with the number>
KILL: <units> — <sunset plan and where the freed capacity goes>

PRICING MOVES (modeled)
1. <move> → +<amount>/yr margin (<assumptions>)
2. <move> → +<amount>/yr (<assumptions>)
3. <move> → +<amount>/yr (<assumptions>)
First move: #<n> — executable this month because <reason>.