Chapter 3

When sales fall, do my costs follow?

Doanh thu giảm, chi phí có chịu giảm theo không?

The chapter's question

If revenue halved, how much would my costs fall?

Big idea

If you cannot separate fixed and variable costs, you cannot set prices.

In this chapter

  1. Part 3.1

    Costs That Don't Move

    Which of my costs stay the same whether revenue rises or falls?

  2. Part 3.2

    Costs That Follow Revenue

    Which costs fall immediately when I sell less?

  3. Part 3.3

    If Revenue Halved

    By what percentage can my costs actually be reduced?

  4. Part 3.4

    Your Break-Even

    How much must I sell each month to be enough?

The reading for this chapter is inside Conan School

This chapter has 4 readings, with case stories and exercises. Chapter 1 of Where the Money Is is free to read right here.

Read in Conan School

Chapters of Where the Money Is

  1. 1.How does a profitable business still run out of cash?
  2. 2.Why does selling more leave me shorter on cash?
  3. 3.When sales fall, do my costs follow?
  4. 4.Is cost-plus pricing safe, or just self-limiting?
  5. 5.Twenty numbers, or just the one that matters?