Only the affected spend is reduced. Include implementation and service-quality impacts separately.
Try this with your own numbersFormula and worked example
Net recurring improvement = spend × saving rate − implementation cost
| Input | Example |
|---|---|
| Current recurring spend | 10,000 |
| Expected saving | 8 % |
| Monthly implementation cost | 200 |
| Calculated result | 600 per period |
Choose reliable inputs
Allow time for preparation, the service itself and cleaning up before the next appointment. For this barbershop calculation, use appointment history, service durations and supply costs and a consistent definition of one appointment.
- Staff time: include the portion belonging to this appointment or reporting period, and record where the value came from.
- Supplies: include the portion belonging to this appointment or reporting period, and record where the value came from.
- Chair occupancy: include the portion belonging to this appointment or reporting period, and record where the value came from.
Use the same currency for every money input. Do not mix weekly costs with monthly revenue, or count the same expense in both an itemised cost and allocated overhead.
Does an 8% supplier saving become 8% more profit?
Only the affected spend is reduced. Include implementation and service-quality impacts separately.
What if this input changes?
If current recurring spend rises by 10%, this example changes by 80 per period. This shows the effect of one change; it does not predict what will happen.
Open the calculator, save your baseline, then change the input supported by the least reliable estimate in your records. Compare both scenarios before committing to a price or capacity promise.