Analyze Your Profit Contribution

How to use this information: Assume you don’t need to earn 5.2 percent pre-tax profit. Perhaps you’re willing to earn 3 percent or just break even on a fully absorbed basis. You can increase mailings to prospects to grow more rapidly. On the other hand, if you want to increase profitability, you can reduce your prospecting. Using a proforma contribution statement like this enables you to adjust your circulation to determine the effect on the bottom line. Knowing the amount of contribution for every mailing will help your business stay healthy.