Heyyooooo, before we jump in, Walter and I want to update the Mostly crew on our latest milestone. Thanks for making this newsletter a success, and most importantly, keeping my local Culver's in business.
On December 9th of 2004, Tracy McGrady scored 13 points in 35 seconds, putting the Houston Rockets on his back and securing a victory over the bewildered Sacramento Kings.
This was one of the ultimate “Put the team on my back” moments in sports history, alongside Marshawn Lynch’s Beast Mode run against the Saints in 2010, and Reggie Miller’s 9 points in 8 seconds against the Knicks in 1995.
The reality is, every company has a #1 product, a #1 sales geo, and a #1 sales segment putting in the extra work to effectively subsidize the rest. We just don’t like to admit it, because it will hurt people’s feelings.
That’s why in the world of business, contribution margin is a key financial metric because it allows leaders to have honest conversations about a specific part of the business’ profitability.
In today’s issue we’ll cover:
The Art vs Science of contribution margin
Common mistakes to watch out for when calculating, implementing, and communicating results (hint: talking about it the right way is the hard part)
A real life example, plus a free template you can use to calculate contribution margin for your own company
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