Profitability does include profit, but these two things are not the same. Both of these two metrics can be used in order to measure company’s financial success. However, profit is all about income or revenue.
Meanwhile profitability is a measurement of efficiency and the ultimate way to measure success or failure. It’s the ability to produce a return on the cost incurred by the company.
In other words whether a company is capable of generating profits from available resources. And in simple words how much money a company was able to make compared to money spent.
How efficient it was in managing its own resources. And how efficient your hustle actually is.
And you know what? We went a step further. By putting expected monthly profits, price and your profit margin you will get a number of units you have to sell to reach your goal.
If you are a creator and you are selling your own products or advertisement space just put the unit price and 100% margin.
But most importantly this calculator will tell you how hard every dollar works for you. Anything below 1 is not acceptable. It means you would be losing money.
At 1 you are break even and everything above means your money are being multiplied at the pace represented by Profitability Index.
Probability on the other hand is also extremely important, yet often neglected measurement. In most simplest form it’s the likelihood or chance that something will happen.
In case of business or hustle it would be the likelihood of achieving success with specific project. How probable it is we will end up where we would like to be. It can be also the number of possible outcomes.
Just like there is no one way to succeed, there is no one way to measure your hustle’s probability. It was also a challenge to create “one-size-fits-all” tool for all possible hustles.
But we have decided to give it a go. So you can take best possible decision for your next business project.
Please bear in mind that high competition is a disadvantage. So as a result your profitability index will decrease. Other than that go nuts and try different options.
Have a look what will work best for. You have more time than money? Perfect! You have more money than time? That can work too!
Anything below 10 is a no-go. You should start to think about it above 10 points mark. However, only index of above 20 can be considered good.
Projects with index of 25 and above have a potential to become winners.
Life of entrepreneur or small business owner can be hard. Usually you have way too much to do and not enough time to sleep. Running your business eats up most of your time.
The main idea behind this website was to create a place where entrepreneurs, hustlers and go-getters could come around to find all the metrics they need to run and analyze their businesses and endeavors to success.
Additionally I have never been able to find anything that would help me to calculate my small business or side hustle’s profitability. Or to help me judge my potential projects probability.
That’s why I have decided to create such tools on my own.
Of course we can calculate it ourselves in some kind of a spreadsheet, but isn’t it more handy to have it done for you?
Especially with everything else explained in details, and served with all the metrics you need.
On top of that I have been always fascinated by numbers.
In my previous life, before I started playing entrepreneurship game, I was a business analyst in one of top investment banks.
Before that I have studied IT & Econometrics and my master thesis was “Application of statistical analysis methods in researches over art production”…
So yeah, I am numbers geek 🙂
You can learn more about me and my businesses by following the link below my picture. It will lead you to my other website – litdealer.com