Managing a Business that Sells Only Hours

How to Make Money When Selling Your Time A perspective on consulting in today's profit and cost conscious consulting market Presentation by Jeremiah Josey www.JeremiahJosey.com Member - Mensa International © Jeremiah Josey www.JeremiahJosey.com

Business and Numbers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com A BUSINESS IS NUMBERS THE NUMBERS HAVE TO WORK

What are “The Numbers”? ,[object Object],[object Object],[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com = Income left over after taking away the expenses PROFIT

Business and Profits ,[object Object],© Jeremiah Josey www.JeremiahJosey.com

Poor Business ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com

Hamburgers Anyone? ,[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com

So, Consulting and Business? ,[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com ,[object Object],[object Object],[object Object],[object Object]

Commodity Consulting – Trading Hours for Money ,[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com PROFIT = SELL RATE x SOLD HOURS – HIRE RATE x TOTAL HOURS – OVER HEADS

The Equation ,[object Object],[object Object],[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com

The Result – A “Galaxy Chart” © Jeremiah Josey www.JeremiahJosey.com

Interpreting the Result ,[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com

Examples – Poor Business ,[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com Lower the rates to get more work, but still losing money

Examples – Good Business ,[object Object],© Jeremiah Josey www.JeremiahJosey.com … to here, being profitable, and working less. … here, working really hard and going broke…

In Practical Terms ,[object Object],[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com

The Equation © Jeremiah Josey www.JeremiahJosey.com % L ABOUR MARGIN = 1 - % UTILISATION * (1 - % O VERHEADS - % P ROFIT ) ,[object Object],[object Object],[object Object],[object Object]

In The Final Analysis ,[object Object],[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com

Improving ,[object Object],© Jeremiah Josey www.JeremiahJosey.com Overheads Utilisation Focus is best when it is applied to one thing at a time Spend time on one of these items each week and then move to the next Each stage on the cycle calls on different skills and tools

Typical Components of a Sell Rate © Jeremiah Josey www.JeremiahJosey.com 10% for Profit 15% for Utilisation Provision 7% for Non-Labour Office Overheads 13% for Corporate Overheads 3% for Payroll Tax + Insurance 4% for Leave Provision Hire Costs per Hour (Annual Salary + pension divided by 2080 or direct hourly cost) Makes it complicated trying to track all of these variables

Benefits of Using Galaxy Charts ,[object Object],[object Object],[object Object],[object Object],© Jeremiah Josey www.JeremiahJosey.com

Managing a Business that Sells Only Hours

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