We benchmark our clients profits every year.
In fact we build our database everytime we submit a VAT return, but that is based on management accounts and hence subject to changes at year end.
Doing this and working with our clients gives us great insight into what works to make them more profitable – and more crucially, what doesn’t.
One of the things that’s really interesting is how our clients profits change dramatically when they work with us.
And this isnt a one off change, we’re talking year on year double digit profit growth.
That’s planned obviously by us and executed perfectly by them.
The average profit per client in 2016 is £78,714.
This is £12,348 better than 2015.
So life’s is getting much better, on average, for all of our clients
But bear in mind of course that this is £78,714 is not a true profit.
It’s not a ‘true profit’ because most entrepreneurs, for tax reasons don’t put through a commercial salary consummate with the amount of time for spent working in the business by the owners.
In other words, the costs for the time we put in to run our business.
At our last ProfitMaker Summit we asked what your time as an entrepreneur was worth. In other words, given the work you do, the risks you take and the responsibilities you shoulder, what would you expect to be paid if they were doing exactly the same things but working as the Managing Director within someone else’s business.
If you were the MD of someone else’s business then your package would range from £70,000 to well over £120,000 with the average being £83,235
What does this mean?
You’re underpaid
Simple.
If we were to put a commercial salary through for you into your accounts then, on average, you are making a loss.
And that’s simply not good enough, for us at least.
We’re not seeing you grow out of entrepreneurial poverty.
And eradicating entrepreneurial poverty is our goal, our mission.
Your business needs to perform as well as your competition who could employ you and pay your more than you get from your own business.
This is why we work hard to ascertain what is causing entrepreneurial poverty.
Whilst on the surface businesses in your sector can look very different (for example, they sell different products, make different things, perform different services. But at the heart of every business what we all do is exactly the same.
We solve other peoples problems and they pay us for this.
The thing that differentiates a good business from a great business in just one thing: A roadmap
But here’s the great news
You can get one very easily, if you want to earn what you are truly worth and are ready to put in a lot of hard work.
Here are the key aspects of the roadmap that we build for our clients.
If you get these 7 things right, then you’ll be part way to ending entrepreneurial poverty.
- Have a clear written strategy
- Charge the right prices
- Provide an excellent service
- Become very good at marketing
- Build world class business systems
- Measure the right things
- Hire your A Team