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There’s a frustrating truth every business deals with early into its growth. To reveal that truth, I’ll start with a song title by hip-hop legend, The Notorious B.I.G.:

“Mo money, mo problems.”

The Notorious B.I.G. is literally saying “more money, more problems.” And although this hit song doesn’t dive into the intricacies of accounting, it does support a frustrating truth about business: the more revenue you generate from sales, the more you’ll have to spend to keep selling.

Let’s unpack why that’s the case with one of the most important and useful financial figures to a growing business today: variable cost.

Variable costs vary because they can increase and decrease as you make more or less of your product. The more units you sell, the more money you’ll make, but some of this money will need to pay for the production of more units. So, you’ll need to produce more units to actually turn a profit.

And because each unit requires a certain amount of resources, a higher number of units will raise the variable costs needed to produce them.

A kitchenware maker might sell 10 knife sets for a total of $300, for example, but maybe $100 of this revenue goes into crafting the next 10 knife sets. If the business sells 20 knife sets for $600, it pays $200 of this revenue to make the next 20. The kitchenware maker’s net revenue only increased by $100, while its variable costs rose by $300.

Hence the words of rapping sensation The Notorious B.I.G., “mo money, mo problems.”

Variable costs aren’t a “problem,” though — they’re more of a necessary evil. They play a role in several bookkeeping tasks, and both your total variable cost and average variable cost are separate calculations. With that in mind, here’s what you need to know about variable cost in fewer than 200 words:

Variable Cost Defined in 200 Words

Variable cost denotes the money your business specifically spends on the development of goods and services. Businesses can use variable costs to calculate more complex financial values, such as their contribution margin and break even point.

You can represent your variable cost two different ways: by total variable cost or by average variable cost.

Total Variable Cost

Your total variable cost is the sum of the variable cost of each individual product you’ve developed. Calculate total variable cost by multiplying the cost to make one unit of your product by the number of products you’ve developed.

For example, if it costs $60 to make one unit of your product, and you’ve made 20 units, your total variable cost is $60 x 20, or $1,200.

Average Variable Cost

Your average variable cost uses your total variable cost to determine how much, on average, it costs to produce one unit of your product. You can calculate it with the formula below (for reference, the equation to the top left of the box is your total variable cost).

Total Variable Cost vs. Average Variable Cost

If the average variable cost of one unit is found using your total variable cost, don’t you already know how much one unit of your product costs to develop? Can’t you work backwards, and simply divide your total variable cost by the number of units you have? Not necessarily.

While total variable cost shows you how much you’re paying to develop every unit of your product, you might also have to account for products that have different variable costs per unit. That’s where average variable cost comes in.

For example, if you have 10 units of Product A at a variable cost of $60/unit, and 15 units of Product B at a variable cost of $30/unit, you have two different variable costs — $60 and $30. Your average variable cost crunches these two variable costs down to one manageable figure.

In the above example, you can find your average variable cost by adding the total variable cost of Product A ($60 x 10 units, or $600) and the total variable cost of Product B ($30 x 15 units, or $450), then dividing this sum by the total number of units produced (10 + 15, or 25).

Your average variable cost is ($600 + $450) ÷ 25, or $42 per unit.

Variable Cost Examples

So, what’s considered a variable cost to the business?

Depending on the goods or services you develop, you can classify many of your expenses as variable costs. In general, any recurring cost that doesn’t fluctuate as the business grows or shrinks is a fixed cost. A classic fixed cost is rent on office space: no matter what happens within the business, you still pay the same building rent. So, any cost that doesn’t fall into this category is likely a variable cost.

To make it easier for you to identify which of your costs you should factor into your total variable cost calculation, we’ve put together a brief list of variable cost examples below.

• Physical materials: this can include parts, cloth, and even food ingredients required to make your final product.
• Production equipment: if you automate certain parts of your product’s development, you might need to invest in more automation equipment or software as your product line gets bigger.
• Sales commissions: the more products your company sells, the more you might pay in commission to your salespeople as they win you customers.
• Staff wages: The more products you create, the more employees you might need, and the bigger your payroll.
• Credit card fees: businesses that receive credit card payments from their customers will incur higher transaction fees as they deliver more services.
• Packaging and shipping costs: you might pay to package and ship your product by the unit, and therefore more or fewer shipped units will cause these costs to vary.

It can be daunting to calculate expenses that change as your company evolves. Sometimes, you just want to know exactly what you’re paying to run your business. Using the formulas above, however, you’ll be able to easily track your variable costs no matter what stage of life your business might be in.

A PDF, short for portable document format, is commonly used to view shared documents. The PDF format preserves a document’s formatting, which means you can look at the document on any device. But the key word here is “view” — you can’t edit a PDF without using a specific PDF-editing tool, which is where things get tricky.

If you’ve got a ton of data already formatted in a PDF, you don’t want to waste time manually re-entering that data into an Excel sheet.

Luckily, you don’t need to: there are plenty of free tools you can use to convert a PDF to an Excel file. Since all of the tools function similarly, we’ll show you how to use one of the more popular options, and supply a list of alternatives you can try out.

How to Convert a PDF to Excel

PDFtoExcel.com is a fantastic free tool for a few reasons: it’s secure (your downloads are deleted soon after conversion, and your files are only accessible by software agents); it converts documents of all sizes; the data you import is extracted accurately into rows and columns for Excel; and you can use your .xlsx converted file for various Microsoft Excel versions (7, 10, 13), LibreCalc, OpenCalc, or other office suites compatible with MS Office.

Plus, you don’t need to create an account to use it, which makes the whole process simple and quick (I converted my PDF file to Excel in under three minutes).

Here’s how to use it:

1. Go to PDFtoExcel.com, and click “Upload” (you can also drag and drop, or choose from Dropbox, Google Drive, or OneDrive)

2. Choose the PDF file you want to upload, and click “Open”

3. Click the orange “Free Download” button

4. Now, the PDF is downloaded onto your computer in an .xlsx format, which means it’s ready to use in Microsoft Excel (versions 7, 10, 13) LibreCalc, OpenCalc, or other office suite compatible with MS Office

5. Open Excel, and go to “File” → “Open”. Find your .xlsx file, and click “Open”

6. There you go! Your PDF is now converted in Excel

The other conversion tools work similarly, but some offer unique benefits. Take a look at our list to decide for yourself if one of them suits your business’s needs more than the rest.

Other free tools to convert a PDF to Excel:

• Tabula: Tabula extracts your PDF data into a format that Excel can read without difficulty, but doesn’t change your PDF into an Excel document itself
• Tabello: Tabello is an easy-to-use Chrome extension that converts your PDF data to an Excel format right from your browser, but it’s only free for the first five conversions (after that, it’s five dollars per 20 conversions)
• Free Online OCR: This tool uses character recognition to extract text from PDF’s and convert it into Word, Excel, or Text formats; allows conversions for different language PDF’s, including Chinese and Japanese
• iSkysoft: This is a paid tool, but you can get a free trial; allows you to convert multiple PDF files into Excel, HTML, Word, or other similar formats

These tools enable you to avoid manually entering data into your Excel sheet (if it’s in PDF format, anyway). This frees up your time so you can spend it analyzing and reporting on that data, instead.

Cards Against Humanity is more than just a game to me — it led to an epiphany that shaped the way my company developed its product story around content personalization.

If you think about it, playing Cards Against Humanity and personalizing content are surprisingly similar actions. Both require you to know your audience members, understand what resonates with them, and deliver a relevant message. Both also build over time: a message that works at the start might need to evolve to remain relevant. In Cards Against Humanity, the person who delivers the most engaging experience over multiple rounds wins. In business, the company that consistently engages its audience succeeds.

Before I reframed my thinking, our company struggled to communicate what personalization meant in our industry. References to personalization almost always referred to either ecommerce or conversion rate optimization, and everyone wanted to talk about the greatness of Amazon and Netflix. While CRO might be relevant to our customers, ecommerce rarely is, so the B2C construct didn’t hold water for us. We found ourselves explaining what our product wasn’t more than what it was — a content-driven experience that liberates brands from the confines of one-size-fits-all information architecture.

With a little inspiration from Cards Against Humanity, we were able to tell a content personalization story that people easily understood. Read on to find out how we did this, and how your brand can use an analogy to tell your product story effectively, as well.

An Effortless Approach to Product Story

Cards Against Humanity became more than an inspiration for us; it became a metaphor for our product story. With a simple analogy, we turned convoluted explanations about what we do into something people could immediately grasp.

Conversations that were once frustrating became absurdly easy: “Ever play Cards Against Humanity? You know how you have to learn what people respond to if you want them to pick your card? That’s what we do for your website — make it relevant to different audiences by personalizing the experience.”

People immediately understood our company and were eager to learn more. Sales pitches that once took several minutes were reduced to one effective sentence. When we advertised at conferences, people flocked to our booth to play our customized expansion deck of Cards Against Humanity (appropriately named Marketers Avoid Calamity). Industry influencers gave us shout-outs on social media. Most importantly, this new approach landed us one of our biggest clients, a Fortune 500 software company.

Our association with the game was all about disrupting perceptions of personalization. To dispel personalization’s longstanding association with ecommerce, we needed a way to tell our story with brevity and clarity. Cards Against Humanity allowed us to use something familiar and fun to clarify what we mean by personalization.

The ironic beauty of Cards Against Humanity is that it is not all that personal. Every deck of cards is exactly the same. It’s the unique combinations of cards, and the personalized uses of those cards among players, that makes the difference.

Brands cannot change to fit the needs of every consumer, but they can
adapt their story to appeal to people in different ways.

How to Develop Your Own Product Story

My company’s experience with Cards Against Humanity is special to us, but it’s not the only way to tell a simple, effective product story. Other brands can do the same by following a few basic steps.

One great way to tell a product story is to tap into the power of analogy. We used a simple card game to explain our complex business, and people immediately understood what we meant. Many brands try to use analogies for this purpose, but their attempts don’t always hold up. The key is to identify something familiar and easily understood, which allows your audience to easily connect the dots between your example and your business.

In his book, “Winning the Story Wars,” Jonah Sachs identifies three story elements that capture audience attention: freaks, cheats, and familiars. In our case, we leveraged familiars by using an analogy that helped our audience arrive at the intended understanding on their own.

Pick something that works for your brand, and then find ways to make it your own. Infuse your brand’s personality into the analogy. Our third-party Cards Against Humanity expansion pack highlighted our sense of humor while maintaining a high level of relevance for our audience of content marketers and strategists.

That relevance will determine whether your analogy succeeds or flops. According to Content Science, audiences that perceive content as relevant are eight times more likely to feel they accomplished a goal than users who do not perceive relevance. Having clear goals and the path to meet them is a surefire way to create flow in the digital experience.

Throughout this process, focus on the experience. We were able to leverage the tactile, interactive elements of a card game, which felt completely different than a digital experience. That approach worked for us, but feel free to lean on virtual reality or whatever experience works best for your brand.

Whatever analogy avenue you choose, make it easy for audience members to engage with the experience. Gallup reports that only 20 percent of B2B customers are fully engaged, but those customers provide 23% more value than their disengaged peers.

Cards Against Humanity provided us with both the inspiration and the vessel to create a personalized message that captured our audience’s attention. As Brian Clark said, “The right analogy, at the right time, told the right way, may be exactly what they need to do business with you.”

For us, the right analogy for B2B website personalization was a rowdy party game. Inspiration can come from the strangest places — what unexpected analogy can help you tell your story?

Sean Schroeder is CCO of blueriver and co-founder of the Mura Digital Experience Platform. He’s currently consumed with creating content-driven experiences that spark meaningful, relevant connections.