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Want to keep $80,000 this year? Are you pitching enough? Are you charging correctly?

by DaniMc
11 replies
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#$80 #charging #correctly #pitching #year
  • Profile picture of the author Marta K
    Who gets the 66% of the profit then?
    I don't get it. The cost is cost of outsourcing, producing, staff wage, office etc- if you make £1766 after that, you need less than 50 in a year to get 80k,
    Also why 50 weeks of performance? What about holidays, sick dayst etc? I would say 48 week of performance should be a metric.
    I like how you make numbers so low that it is feasible, but could you explain who get the rest of the profit???
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    • Profile picture of the author DaniMc
      Originally Posted by Marta K View Post

      Who gets the 66% of the profit then?
      I don't get it. The cost is cost of outsourcing, producing, staff wage, office etc- if you make £1766 after that, you need less than 50 in a year to get 80k,
      Also why 50 weeks of performance? What about holidays, sick dayst etc? I would say 48 week of performance should be a metric.
      I like how you make numbers so low that it is feasible, but could you explain who get the rest of the profit???
      My business is separate from me. I leave most of the money in my business to plan for growth, expenses, and taxes.

      Of course, at the end of the year, you probably want to pay yourself a large bonus to zero out the profit of your business and reduce tax liability. Don't take accounting advice from me though!
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  • Profile picture of the author vndnbrgj
    I would imagine the other 66% stays with the company for costs.
    Like outsourcing, marketing materials, gas, phone, business expenses.
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    • Profile picture of the author Marta K
      Originally Posted by vndnbrgj View Post

      I would imagine the other 66% stays with the company for costs.
      Like outsourcing, marketing materials, gas, phone, business expenses.
      No, that's what I was curious about. He talks about company profit- that's after all expenses and overheads, ie costs.
      I understand you leave money for growth, research and developmnet, essentially investing in your company, but that in my opinion should also be part of the cost in this equation.
      Like-outsourcing cost per item is 15% of the price, overhead 10%, cost of sale (bank charges, lead cost, customer helpline)15%with 5% for investment. Than you can have 50% profit that's yours.
      And the dividends are usually paid from profit after tax, so you don't save tax by taking nit out this way. Your salary though is a cost and that's taken before tax, reducing your tax bill.
      Disclaimer, that's not accounting l advice either:-)


      I realy like the idea of counting backwards, from the goal to very small number, it goes in par with JD advice to call for 2 hr per day to get the business rolling
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      • Profile picture of the author misterme
        Originally Posted by Marta K View Post

        ...Like-outsourcing cost per item is 15% of the price, overhead 10%, cost of sale (bank charges, lead cost, customer helpline)15%with 5% for investment. Than you can have 50% profit that's yours. And the dividends are usually paid from profit after tax, so gbgbhh jyykk fifif fdsajhf jdafh4rwyir fsxvbvoi fsfshsd cshjs dfs wrte uiyu dfg i sdfsdf sfd erer
        Perhaps I'm incorrect but I think Dan's big point is to begin with the end in mind and realize where about you need to aim at to achieve your goal and work towards that. As opposed to taking it as whatever happens and no idea of where you need to get to get anywhere near the numbers you want. But inspecting it through the microscope at the onset is absolutely not the point and a stumbling block to the exercise. Fine tune it as you go along. As you actually do it. You want to get to the moon? You aim for the moon. So what you end up in the stars?
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  • Profile picture of the author jgant
    Also consider offering additional services.

    Also, consider incorporating referral fees for your clients if you know how to do affiliate marketing. You can certainly build websites for them, but you can also suggest that you'll generate more clients for them using your own clients. This is affiliate marketing and you can earn some hefty commissions for the right types of businesses.

    Essentially, think of ways to earn more from existing clients. This way you don't have to sell more.

    I liken this in my affiliate marketing biz, where instead of always looking for more products to promote, I think about ways to earn more sales of the winning products I currently promote.
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    • Profile picture of the author DaniMc
      Originally Posted by jgant View Post

      Also consider offering additional services.

      Also, consider incorporating referral fees for your clients if you know how to do affiliate marketing. You can certainly build websites for them, but you can also suggest that you'll generate more clients for them using your own clients. This is affiliate marketing and you can earn some hefty commissions for the right types of businesses.

      Essentially, think of ways to earn more from existing clients. This way you don't have to sell more.

      I liken this in my affiliate marketing biz, where instead of always looking for more products to promote, I think about ways to earn more sales of the winning products I currently promote.

      Yes you can add other things into it - but don't substitute these things for SELLING and PITCHING.
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  • Profile picture of the author DaniMc
    The most important parts to remember are that you can get much higher than 10% closing ratio.

    You should always pitch more than you think you should. Always double the required effort that you have calculated for.

    And, you don't necessarily need to get all $3500 from each sale! You can sell a lower item to a customer and get to $3500 on the second or third sale.
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  • Profile picture of the author Marta K
    I agree, it went off topic:-) I was just curious who get the lion share of the profit, since we were talking small company without shareholders and such, or that's what I assumed.

    I completely agree, that his post was about making a big idea into a small bite size chunks that are actually doable, achieveable and not-so-scary:-)

    I love playing with numbers, Im getting back in business after 3 long years of maternity leave, so forgive me for microscope detailing, that's my private curiosity. I thought maybe I grossly miscalculated the amount of work ahead of me:-) 500k for 80k profit seem scary, when you thought you need a quarter of that to get your numbers right.

    His reasoning is sound though, most businesses fail because of cash flow problems not the ability to pull profit, so keeping cash in the company accounts would definitely help with expansion.
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    • Profile picture of the author DaniMc
      Originally Posted by Marta K View Post

      No, that's what I was curious about. He talks about company profit- that's after all expenses and overheads, ie costs.
      I understand you leave money for growth, research and developmnet, essentially investing in your company, but that in my opinion should also be part of the cost in this equation.
      Like-outsourcing cost per item is 15% of the price, overhead 10%, cost of sale (bank charges, lead cost, customer helpline)15%with 5% for investment. Than you can have 50% profit that's yours.
      And the dividends are usually paid from profit after tax, so you don't save tax by taking nit out this way. Your salary though is a cost and that's taken before tax, reducing your tax bill.
      Disclaimer, that's not accounting l advice either:-)

      I realy like the idea of counting backwards, from the goal to very small number, it goes in par with JD advice to call for 2 hr per day to get the business rolling
      You are missing the point entirely and are missing the value that is in this post.

      In fact, you are doing exactly what this post is trying to combat: Getting caught up in details, letting things fill your mind that are only distractions, and focusing on other things so you don't have to think about selling and closing.

      I laid out the numbers very clearly. You can figure any income goal or overhead that you want. Different businesses are structured differently. Some businesses leave a lot of cash from every sale in the business accounts for various reasons.

      Here is the point: Stop thinking. Set your goal. Work through the numbers. Start making DOUBLE the number of pitches you calculate you will need. Just DO IT. NOW. TODAY. When you wake up tomorrow morning, get your *** on the street and start pitching.

      Does that get us back on track? I hope it helps you. I'm only giving what I think is helpful.


      Originally Posted by misterme View Post

      Perhaps I'm incorrect but I think Dan's big point is to begin with the end in mind and realize where about you need to aim at to achieve your goal and work towards that. As opposed to taking it as whatever happens and no idea of where you need to get to get anywhere near the numbers you want. But inspecting it through the microscope at the onset is absolutely not the point and a stumbling block to the exercise. Fine tune it as you go along. As you actually do it. You want to get to the moon? You aim for the moon. So what you end up in the stars?
      Exactly! Most people get screwed into the floor through all the different things that can be focused on besides sales. You own a business? Your job is to drive sales.

      Originally Posted by Marta K View Post

      I agree, it went off topic:-) I was just curious who get the lion share of the profit, since we were talking small company without shareholders and such, or that's what I assumed.

      I completely agree, that his post was about making a big idea into a small bite size chunks that are actually doable, achieveable and not-so-scary:-)

      I love playing with numbers, Im getting back in business after 3 long years of maternity leave, so forgive me for microscope detailing, that's my private curiosity. I thought maybe I grossly miscalculated the amount of work ahead of me:-) 500k for 80k profit seem scary, when you thought you need a quarter of that to get your numbers right.

      His reasoning is sound though, most businesses fail because of cash flow problems not the ability to pull profit, so keeping cash in the company accounts would definitely help with expansion.
      You should never under-capitalize your operation. That said, if you will only focus on selling, under-capitalization will be a good problem to have and one that you can correct by continuing to drive sales.
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      • Profile picture of the author misterme
        Originally Posted by Marta K View Post

        I was just curious who get the lion share of the profit
        That's easy. Either the government or the future ex wife.
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