What are you going to sell?
Can these services be performed easily and inexpensively with local manpower?
You get to keep all of the money if you do all of the work right? I guess if you shovel snow or ride your bike on your newspaper route, this is the case. Howeverin the world of business, there are many expenses that whittle away at your hard earned dollar. In fact, you will find that there will be months where you work full time and actually have less at the end of the month than when you started. It’s bad enough to be aware that this can and will happen. It’s much worse if you don’t know why it’s happening, how long it will continue or how to fix it. Making money in the serviceindustry is a pretty simple equation.
Volume of Clients x Average Ticket = Revenue
Revenue – Expense = Profit
While the equation is simple, there are many variables that can derail either side of the equation. Here are a few questions to consider.
1) Are my service offerings seasonal?
2) What is the going rate for labor in my market?
3) How much will my supply costs cut from my profits?
4) How much of each dollar will be left over after other costs such as insurance, taxes, credit card fees, maintenance and marketing are paid?
The most wonderful services you canoffer are those that you can charge the most per minute to do, carry little supply cost and have ample amounts of inexpensive labor in your location. All revenue isn’t equal. Margins are important to be projected and tracked so that you don’t find yourself hitting all of your revenue goals and still not having your freedom.