Skill: 1kalin/afrexai-profit-margin (version 1.0.0)

# Profit Margin Analyzer Analyze and optimize profit margins across your business. Identifies margin compression, pricing opportunities, and cost levers. ## What This Does - Calculates gross, operating, and net margins by product/service line - Benchmarks against industry standards (2026 data) - Identifies margin erosion patterns and root causes - Generates pricing adjustment recommendations - Models impact of cost changes on profitability ## How to Use Tell your agent: - "Analyze our profit margins" — gets full breakdown with benchmarks - "Where are we losing margin?" — identifies compression points - "Model a 5% price increase" — shows bottom-line impact ## Margin Framework ### Gross Margin Benchmarks (2026) | Industry | Healthy | Warning | Critical | |----------|---------|---------|----------| | SaaS | >70% | 55-70% | <55% | | Professional Services | >35% | 25-35% | <25% | | Manufacturing | >25% | 15-25% | <15% | | Ecommerce | >40% | 25-40% | <25% | | Construction | >20% | 12-20% | <12% | | Healthcare Services | >45% | 30-45% | <30% | | Legal Services | >40% | 30-40% | <30% | | Real Estate (Brokerage) | >30% | 20-30% | <20% | | Recruitment/Staffing | >25% | 15-25% | <15% | | Financial Services | >50% | 35-50% | <35% | ### The 1% Pricing Rule A 1% price increase on a 10% net margin business = **12.5% profit increase**. This is the single highest-leverage move most businesses ignore. ### Margin Erosion Checklist 1. **Scope creep** — delivering more than contracted (services firms lose 8-15% here) 2. **Discount culture** — average B2B discount is 22%, top performers keep it under 12% 3. **Underpriced legacy contracts** — review any deal older than 18 months 4. **Hidden delivery costs** — support, onboarding, custom work not in COGS 5. **Volume without leverage** — more revenue at same margins ≠ more profit if fixed costs grew 6. **Currency exposure** — international revenue without hedging 7. **Vendor cost inflation** — AWS/Azure/GCP bills creep 15-20% annually without optimization ### Pricing Power Assessment Rate each factor 1-5: - **Switching costs** — how painful is it for customers to leave? - **Differentiation** — can customers get this elsewhere easily? - **Value visibility** — do customers see/measure the value you deliver? - **Competitive density** — how many alternatives exist? - **Customer concentration** — does one client control >20% of revenue? Score 20+: Strong pricing power. Raise prices 5-10% annually. Score 15-19: Moderate. Raise selectively on new deals. Score <15: Weak. Focus on differentiation before pricing. ### Cost Structure Analysis #### Fixed vs Variable Ratio | Business Type | Target Fixed % | Target Variable % | |---------------|---------------|-------------------| | SaaS | 70-80% | 20-30% | | Services | 40-50% | 50-60% | | Manufacturing | 30-40% | 60-70% | | Marketplace | 60-70% | 30-40% | High fixed cost = operational leverage (margins expand with scale). High variable cost = flexibility (margins stable but limited upside). ### Contribution Margin by Product Line For each product/service: ``` Revenue: $___ - Direct costs (COGS): $___ - Variable selling costs: $___ = Contribution margin: $___ Contribution margin %: ___% ``` Kill anything below 20% contribution margin unless it's a strategic loss leader with proven upsell path. ### Quick Wins (30-Day Margin Improvement) 1. Audit discounting — cap at 15%, require VP approval above 10% 2. Review tool/SaaS spend — cancel unused licenses (avg company wastes 25%) 3. Renegotiate top 3 vendor contracts — 5-15% savings typical at renewal 4. Implement value-based pricing on at least one product line 5. Add a premium tier — 10-20% of customers will upgrade ### 90-Day Margin Optimization Roadmap **Month 1:** Audit — map all revenue streams, costs, margins by line **Month 2:** Price — implement increases on weakest-margin products **Month 3:** Cut — eliminate sub-20% contribution margin lines, renegotiate vendors ### Annual Margin Health Check Run quarterly: - [ ] Gross margin trend (3-quarter rolling) - [ ] Net margin vs industry benchmark - [ ] Customer acquisition cost payback period - [ ] Revenue per employee trend - [ ] Pricing power score reassessment --- ## More Resources - **AI Revenue Leak Calculator** — Find where your business is bleeding money: https://afrexai-cto.github.io/ai-revenue-calculator/ - **Industry Context Packs** ($47 each) — Deep frameworks for your specific industry: https://afrexai-cto.github.io/context-packs/ - **Agent Setup Wizard** — Configure AI agents for your business in minutes: https://afrexai-cto.github.io/agent-setup/ ### Bundle Deals - 📘 AI Automation Playbook — $27 - 🎯 Pick Any 3 Packs — $97 (save $44) - 📦 All 10 Industry Packs — $197 (save $273) - 🏆 Everything Bundle — $247 (all packs + playbook + setup wizard)


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