The Labor Value Multiple and Why It’s the Most Important Metric for Service Businesses

One question I get asked a lot is: what is the single most important financial metric I should focus on? Well, if you own or manage a service organization, that metric is Labor Value Multiple, or LVM.

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Top Technology for Small Business Accounting

The great thing about modern technology for small business accounting is that there are so many options. But the bad thing about technology for small business accounting is that there

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The LTV:CAC Ratio – Evaluating Customer Acquisition Cost

Last week I showed you how to calculate customer acquisition cost in real dollars. While this is an important metric for you to understand about your business, what's even more useful is understanding how that CAC, customer acquisition cost, relates to your LTV, or lifetime value of your customers.

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How to Calculate Customer Acquisition Cost

Hi. Today we're going to be talking about customer acquisition cost. As the head of marketing for SmartBooks, it's my job both to bring in new customers to SmartBooks and to do so at a cost effective price.

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How to Calculate Gross Profit Margin: A Small Business Owner’s Guide

The Gross Profit Margin calculation describes how profitable a company’s goods and/or services are. It’s an important metric, and it’s one of the easiest KPIs to calculate. There are two

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How to Increase Contribution Margin: A Small Business Owner’s Guide

In part 2 of our series on contribution margin, we’ll be looking at how business owners can increase contribution margin percentages by using three key inputs: Price Cost of Goods

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How to Calculate Contribution Margin: A Small Business Owner’s Guide

Do you know how to calculate contribution margin? Are you currently tracking this crucial business metric? Your company’s contribution margin is a simple calculation of how profitable a product or

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The Power of the Labor Value Multiple as a Performance Metric

Of all the metrics governing financial performance, we need to put a spotlight on one in particular: your Labor Value Multiple (LVM), sometimes also referred to as the labor efficiency

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How to Manage Overhead Cost Before It Gets Up to Your Neck

As a metric, overhead refers to any costs that aren’t directly needed to service a client. Employee utilization and pricing are directly tied to overhead cost. Essential and Nonessential Overhead

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The Impact of Customer Acquisition Cost on Profitability

One constant in running a professional services organization is the constant need to acquire new business. Whether a professional services firm’s revenue is project-based, recurring monthly, or something in-between, the

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