The Game with Alex Hormozi Gross Vs. Net Margin | Ep 247
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Nov 3, 2020 Explore the crucial difference between gross and net margin that can transform your business perspective. Discover how increasing gross margins can drastically boost profits by optimizing costs and strategically adjusting pricing. Hear practical examples that showcase the importance of maintaining high gross margins for sustainable growth. This insights-packed discussion is perfect for small and medium-sized business owners looking to maximize their profitability.
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Gross vs. Net Margin
- Grasping the difference between gross and net margin is crucial for business owners.
- Gross margin, the direct cost of fulfilling goods or services, drives net margin (profit).
Target 80% Gross Margin
- Aim for an 80% gross margin in service-based businesses.
- Increase margins by decreasing fulfillment costs or increasing prices.
Impact of High Margins
- Higher gross margins enable scaling and profitability.
- Each incremental increase (e.g., 80% to 90%) doubles profitability.
