StaerasProfitability and cost
Sales are steady. Why are margins falling?
Examine costs and contribution by product, service, customer or channel.
Business performance consulting
Pricing, costs and operating performance.
Staeras examines your business records to explain margin changes and assess decisions about pricing, costs and capacity.
Not sure where to start? Tell us what needs attention. Consulting for restaurants.
Services
Profitability, pricing and operating decisions.
Pricing and commercial performance
What would a price or discount change mean for margin?
Assess prices, discounts and sales mix to decide what to test.
Operating performance
Does capacity match demand? Why do locations differ?
Compare staffing, capacity and workload with demand across locations.
Planning and scenarios
Would an expansion or supplier change make financial sense?
Compare financial implications under different cost, revenue and capacity assumptions.
We agree the scope around your question and the records available.
The engagement
How we work.
A written review of the evidence, options and financial implications, followed by a discussion of the findings.
View an exampleYou provide the agreed records and operating context. Implementation follow-up is agreed separately.
Agree the work
Discuss your decision and current reports, then agree the scope, fee, timing and required records before work begins.
Examine the records
Reconcile reports, investigate the question and compare alternatives.
Review the findings
Discuss the evidence, prioritized recommendations and financial estimates with their assumptions, then agree next steps.
Example analysis
Evaluating a volume discount.
The question
Would more business justify a lower price?
Compare a 3% discount on all invoices with 20% growth in order value at current prices. Total account contribution over four weeks depends on how the extra orders arrive.
- Current$11,000
- Extra orders scheduled$12,248
- Extra orders at short notice$8,261
Adjust the assumptions
The discount applies to existing and added business.
The chart shows the worked 3% discount and 20% growth example. Interactive controls require JavaScript.
Measured at current prices, before the new discount.
Assumptions and calculation
The figures are illustrative. Current work stays at $52,000 in sales and $41,000 in linked costs before the new discount. Added order value is $52,000 × selected growth. Net sales are ($52,000 + added value) × (1 − selected discount).
Added scheduled work uses the example’s $28,000 / $40,000 cost ratio; short-notice work uses $13,000 / $12,000. Each bar shows total account contribution if all added work follows that pattern.
Scheduled growth needed to match current contribution is discount / (1 − discount − scheduled cost ratio). Short-notice costs already exceed sales value, so more short-notice work cannot recover the discount under these assumptions.
Contribution deducts product, delivery and outside rush-production costs; it is not net profit. The model assumes comparable orders, unchanged product mix and enough capacity for the extra work. Costs scale with added order value. Payroll, premises, other overhead and any new capacity costs are excluded.
The decision
Put conditions on the discount.
Contribution rises by $1,248 with scheduled growth and falls by $2,739 with short-notice growth.
Contribution after product, delivery and outside rush-production costs.
Before agreeing
Check capacity and expected orders. Discuss a scheduled-order discount and separate urgent-service charges.
Read the discount analysisAfter a test
Compare total contribution and delivery performance with the assumptions, accounting for other changes.
Worked example: 3% discount and 20% growth
Illustrative figures over four weeks. The current account has $52,000 in net sales and $41,000 in linked costs, leaving $11,000 of contribution. Sales exclude tax, refunds and existing discounts. Invoices, order changes, product costs, courier and outside rush-production bills are matched to the same work and period. The tables below keep the original 3% discount and 20% growth assumptions; the chart shows total account contribution for the selected settings.
| Included amount | Scheduled orders | Short-notice orders |
|---|---|---|
| Net sales | $40,000 | $12,000 |
| Product costs | $24,000 | $7,200 |
| Delivery and outside rush charges | $4,000 | $5,800 |
| Contribution after these costs | $12,000 | −$1,000 |
The proposal adds $10,400 of order value before the new discount. The discount applies to existing and added business. At unchanged volume and costs, it would reduce contribution to $9,440.
| Included amount | Added work scheduled | Added work short-notice |
|---|---|---|
| Net sales after discount | $60,528 | $60,528 |
| Product and service costs | $48,280 | $52,266.67 |
| Estimated contribution | $12,248 | $8,261.33 |
At these worked-example settings, scheduled growth produces about $12,200 of contribution, an increase of about $1,200. Short-notice growth produces about $8,300, a decrease of about $2,700.
The scenarios apply each order pattern’s cost ratios to the added work, holding product mix constant and assuming sufficient capacity. Product costs and service charges are counted separately. Assess expected orders, customer response and capacity before agreeing the discount; these determine how closely the scenarios represent the proposed work.
Payroll, premises, other overhead and any new capacity costs are excluded. Contribution does not establish net profit.
About Staeras
Business performance consulting.
Staeras is a business performance consulting practice. We bring financial and operating records together to examine results and assess decisions, informed by your knowledge of the business.
Discuss your businessBefore we talk
Working with Staeras.
What if our records are incomplete?
We start with the reports you have, identify missing information and agree any preparation before analysis. Contribution comparisons use relevant costs alongside sales.
Do we need new software?
We start with existing exports and reports, alongside your advisers. Any preparation or additional records are discussed first.
Is my business a fit?
We investigate pricing, costs and operating decisions using your business records. The first conversation establishes the priorities and scope.