Definition

Listing all the expenses that come with running the business. Understanding these costs helps you plan prices and spot savings.

What to consider

  • Include both direct and indirect costs in your analysis.
  • Benchmark against industry standards.
  • Use findings to inform strategic decisions.

Real world scenarios

  • A restaurant owner compares the profitability of each menu item to decide on future offerings.
  • A small manufacturer conducts a profitability analysis on different product lines.
  • An online seller reviews profitability by examining net profits per product.

Related terms

Entrepreneurial Finances