The Profitable Provider

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The Profitable Provider

  1. 1. The Profitable Provider Brett Dillon RESNET Conference 2011, Orlando FL Quality Passion KnowledgeFriday, March 4, 2011
  2. 2. Profit Costs Models PlanningFriday, March 4, 2011
  3. 3. The Myth of the Entrepreneur • Because I’m good at what I do, I can make more money working for myself!Friday, March 4, 2011
  4. 4. Reality Check! • Every year Year 1: 600,000 in business over Year 5: 200,000 in business 1,000,000 businesses Year 10: 40,000 in business are started The reason for the failure rate is the assumption of the entrepreneur that if they understand the technical work of a business, they understand a business that does that technical work.Friday, March 4, 2011
  5. 5. Do You Own a Business or a Job? • Works for wages • Works for profit • Does the work • Manages work • Plans growth • Plans the work The difference is your perspective!Friday, March 4, 2011
  6. 6. How much MONEY do you want? • Overhead • Profit • Labor Costs • How much do you charge?Friday, March 4, 2011
  7. 7. How much TIME do you spend? • Estimate time needed • Adjust with experience • Use sales goalFriday, March 4, 2011
  8. 8. Time, Quality & Money Time = Quality Time = Money Money = Quality Knowledge = Power Power = Work / TimeFriday, March 4, 2011
  9. 9. Time, Quality & Money K = W / T = > T, < K K = W / M = > M, < K K = W / Q = > Q, < K P = W / T = > T, < P P = W / M = > M, < P P = W / Q = > Q, < PFriday, March 4, 2011
  10. 10. Profit • Profit = Revenues - CostsFriday, March 4, 2011
  11. 11. Costs • Accreditation Fee • Legal • Software Licensing • Marketing • Labor • Professional Development • Burden of Labor • Vehicles • Taxes • Fuel • Insurance • Shipping • Rent • Financing • Travel • EquipmentFriday, March 4, 2011
  12. 12. Revenue • Sales • Who is buying? • What are they buying? • Why should they buy? • Why should they buy from me? • How are they buying? • When are they buying?Friday, March 4, 2011
  13. 13. Consultant • 1,030 hours/yr • (annual overhead + profit) / 1,030 = overhead charge rate • overhead charge rate + Labor Cost = hourly rate • Estimated time for job x hourly rate • Adjust with experienceFriday, March 4, 2011
  14. 14. Cost-Based • Costs / profit margin = sales price • Cost PlusFriday, March 4, 2011
  15. 15. Performance-Based • Maximizes shared value creation • Creates more space between value to client & costs to do business • Communicate value to clients • Be unfair • Context • DeliveryFriday, March 4, 2011
  16. 16. Friday, March 4, 2011
  17. 17. ProfitFriday, March 4, 2011
  18. 18. Friday, March 4, 2011
  19. 19. 5 Forces • Rivalry among Existing Competitors • New Entrants • Power of Suppliers • Power of Clients • Threat of SubstitutesFriday, March 4, 2011
  20. 20. 4 Profitability Factors • Growth rate • Technology & innovation • Government support or interference • Complementary products & servicesFriday, March 4, 2011
  21. 21. Internal Capabilities • How can you approach new markets? • What processes are going to be used in daily business?Friday, March 4, 2011
  22. 22. Brett Dillon www.ibsadvisorsllc.com @thebrettdillon @ibsadvisorsllc info@ibsadvisorsllc.com 210-448-1106Friday, March 4, 2011

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