Profit Blog

Jarmo Manninen & Muutosdraiveri Oy


What are the risks in managing a company by passing on cost changes to prices?

29. huhtikuuta 2025

If the company's financial management conditions have not been put in place, this means in particular the following:

1. The company does not know how well or poorly the products and services sold by the company are profitable.

2. No performance targets have been defined for all the resources invested in by the company, i.e. people and machines, and their implementation cannot be managed in the right way.

3. No operational efficiency targets have been defined for all the resources invested in by the company, i.e. people and machines, and their implementation cannot be managed in the right way.

4. No capacity utilization targets have been defined for all the resources invested in by the company, i.e. people and machines, and their implementation cannot be managed in the right way.


The prices of the products and services sold by the company must be determined based on their market, market situation and strategic importance in achieving the company's profitability objectives. For this reason, the company must define the company's profitability objectives by product and service. If a company does not know how well the company has achieved its profitability targets by product and service, then it also does not know how much the company needs to be able to develop its product-specific and service-specific profitability in order to achieve the company's profitability targets.

If the issues I have presented above have not been put in place and kept under control in the company, it means that the pricing and operations of the company's products and services are based on assumptions and guesses. In practice, this means that it is only a matter of time before the company first runs into profitability problems in the market, then payment difficulties and finally bankruptcy. This can be prevented when the company's financial management conditions have been put in place and are kept in good condition.


Did the issues present above spark thoughts in you?

I encourage you to share this blog post of mine on social media. If you have any suggestions for the topics of the next blog posts, I will gladly accept them.


I hope that you were interested in this matter and that you can continue to be involved.

I have written four books on creating the conditions for the company's financial management, and they are available in well-stocked bookstores and online bookstores in Finland, for example from BoD (Books On Demand) at:





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