The Profitable Provider
- 1. The Profitable Provider Brett Dillon RESNET Conference 2011, Orlando FL Quality Passion Knowledge Friday, March 4, 2011
- 2. Profit Costs Models Planning Friday, March 4, 2011
- 3. The Myth ofthe Entrepreneur • Because I’m good at what I do, I can make more money working for myself! Friday, March 4, 2011
- 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. Do You Owna 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. How much MONEY do you want? • Overhead • Profit • Labor Costs • How much do you charge? Friday, March 4, 2011
- 7. How much TIMEdo you spend? • Estimate time needed • Adjust with experience • Use sales goal Friday, March 4, 2011
- 8. Time, Quality &Money Time = Quality Time = Money Money = Quality Knowledge = Power Power = Work / Time Friday, March 4, 2011
- 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, < P Friday, March 4, 2011
- 10. Profit • Profit = Revenues - Costs Friday, March 4, 2011
- 11. Costs • Accreditation Fee • Legal • Software Licensing • Marketing • Labor • Professional Development • Burden of Labor • Vehicles • Taxes • Fuel • Insurance • Shipping • Rent • Financing • Travel • Equipment Friday, March 4, 2011
- 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. 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 experience Friday, March 4, 2011
- 14. Cost-Based • Costs / profit margin = sales price • Cost Plus Friday, March 4, 2011
- 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 • Delivery Friday, March 4, 2011
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- 19. 5 Forces • Rivalry among Existing Competitors • New Entrants • Power of Suppliers • Power of Clients • Threat of Substitutes Friday, March 4, 2011
- 20. 4 Profitability Factors • Growth rate • Technology & innovation • Government support or interference • Complementary products & services Friday, March 4, 2011
- 21. Internal Capabilities • How can you approach new markets? • What processes are going to be used in daily business? Friday, March 4, 2011
- 22. Brett Dillon www.ibsadvisorsllc.com @thebrettdillon @ibsadvisorsllc info@ibsadvisorsllc.com 210-448-1106 Friday, March 4, 2011