Profit Through Efficiency

Profits are driven by the combination of revenue and expenses, the result of which is efficiency. This is true whether you’re an eCommerce, SaaS, accounting, or pizza business. The more efficient the expenses are, relative to the revenue, the more profitable the business is.

The purpose of (PentaneOS and PentaneEFX) is to create real-time clarity around how efficiency (or lack thereof) is driving profits or losses inside a company.

Three critical areas of efficiency tracked inside PES: these include efficiency related to fixed, variable, and advertising expenses, which indicate how efficient the underlying business is relative to revenue.

How should you use PES? The score is based on a 0 to 100 point scale, and is the average of the expense efficiencies for the referenced period of time. The higher the PES out of 100, the more efficient the overall business – and more profitable.

Based on the information and clarity gleaned from PentaneOS, you’ll have some direction on making adjustments, or areas to focus on, that should promote higher PES over time — think, reducing fixed or variable expenses, increasing contribution margin dollars by driving up ROAS, etc. So look for up or down trends as you adjust metrics in the company, then follow PES over time to get an idea of how the company is tracking.

If you’re ever wondering how the overall health of your business is performing day to day, week to week, or month-to-month, the PES is a great indicator.

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