Rocket Science or Simple Math?

Creating a six-figure business model is not rocket science – it’s simple math! I’m not knocking the coaches out there (including myself!) who offer info products and services on building your business properly to achieve six-figure success. Where I get hung up is whether or not there is really a magic formula (combined with good marketing hype), or is it just simple math and a good plan?

It stands to reason if you want to gross $100,000 or more in revenue services annually based on a working model of “x” number of hours per week, you need to price your services accordingly. For example, you have decided you will dedicate 30 hours per week to billable services. That means you need be charging roughly $65 per hour for each of those 30 hours. Of course that $65 per hour fee needs to have built in a profit margin and cover all of your operating expenses.  If your operating expenses are too high and you have built in no profit then you’re working for little to nothing in the end.

Want to work fewer hours? Then you need to increase your rate or offset the service hours with other income, such as: offering products for sale, selling advertising on your site or in your newsletter, or joining and promoting affiliate programs. You can also take on more clients and partner with other VAs or service providers to handle the additional workload.

By comparison, if you’re only charging $25 per hour then you have to work more than double the number of hours – 4,000 hours annually vs 1,560 – that your VA colleagues put in. And if you’re charging less than $25 per hour, well… you have my sympathy.

In the traditional sense of a 40-hour workweek (that’s entirely billable hours), at $65 per hour you could gross $135,200 annually. If you work with low overhead and keep expenses down you could achieve net income before taxes of over $100,000.

Do the math! As I said, it’s not rocket science—it’s simple math.

And by all means, there is nothing that says every VA company has to be achieving six-figures—net or gross—to be considered a success.


2 comments on this post.
  1. Kathy Ritchie:

    Hear, Hear! Great thoughts Kelly! And another thing to think about, what does success mean to the individual? Personally I’m happy making a bit less than that and having a personal life too. From one VA vet to another, you Go Girl!! :-)

  2. admin:

    Thanks, Kathy. I completely agree that success is an individual thing. We don’t have to follow what everyone else is doing — do what works for you.

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