How to Make Profits
Posted on July 31st, 2009
The primary goal of a businessman is to make profits. Author and entrepreneur CJ Hayden explains that to post profits, one has to have a good business model. One needs to have a profit-making plan.
Mr. Hayden cites two business models for a business man who is offering his services for $100 per hour. If his business model entails working exclusively for a single major client for weeks or months at a time he would be able to earn a lot. Working four hours everyday, five times a week, every week of the year would allow you to earn $100,000.
However, if your business model entails having a couple of clients and working only two to four hours per month for each, to earn $100,000 you need 20 clients at once and see them an hour per week.
The first business model is sensible as you only need a few clients each year and allows you blocks of time to market yourself. In the second business model, you need steady flow of new clients coming in and you would only have small chunks of time to market yourself.
To fix the second business model, you may think about increasing your hourly fee to $150 or $200 per hour. However, rates like this may be too steep for potential clients. Mr. Hayden explains that increasing rates is not the only way to patch up a broken business model for fee for service business.
He suggests charging by the day or half-a-day. This enforces minimum on your clients and avoids short appointments that chips your work schedule.
He says you could also charge a flat fee per project. This allows you to bill for the time you spend planning, organizing and just going over your client’s concern.
You can have your client pay you by the month in advance. This assures them that you will be available for them and can ensure you a set number of hours.
Mr. Hayden calls on business men to look into their business models to know why their business is not earning as much as they would like.
